Global investors queue up for LIC IPO anchor book

Global investors including Blackstone, BlackRock, Abu Dhabi Investment Authority, Government of Singapore Investment Corp and Capital International are understood to have held preliminary discussions regarding anchor book allocation in the proposed initial public offering of Life Insurance Corporation of India (LIC), government and banking. is of. officials told ET.

Canada’s pension managers such as the CPPIB and CDPQ, the University of California Endowment, Brookfield and the Kuwait Investment Authority are among other funds with whom meetings are going to take place this week and early next week, he said. The 10 investment banks handling the issue are reaching out to over 100 top global fund managers, sovereign and pension money managers and private equity funds. People with knowledge of the matter said the share sale could cost the insurance company around $110 billion.

LIC did not respond to queries. Individual bankers and fund houses were not immediately available for comment.

The Finance Ministry is yet to take a final call on the IPO timeline.

IPO expected in March quarter

The government has hired Goldman Sachs, JP Morgan, Citigroup, Nomura, Bank of America Securities, JM Financial, SBI Caps, Kotak Mahindra Capital, ICICI Securities and Axis Capital to manage the share sale.

One of the people quoted above said, “Anchor allocation talks are underway. We are seeing good response and approach has been created with only quality institutions.”

The government is looking to sell up to 10% of its stake through IPO as well as issue fresh shares to expand the insurer. While bankers are yet to give a full confirmation on the valuation, the finance ministry is expecting Rs 10-12 lakh crore, which will result in at least Rs 1 lakh crore being raised for the government.

The Department of Investment and Public Asset Management (DIPAM) is expecting to launch the LIC IPO in the January-March quarter.

“We are working very hard on LIC’s IPO. It will be a huge event in the first quarter of 2022 for the capital markets,” DIPAM secretary Tuhin Kanta Pandey said earlier this month. The IPO is considered crucial to meet the government’s disinvestment target of Rs 1.75 lakh crore for FY12.

Starting with an initial capital of Rs 5 crore in 1956, LIC’s asset base crossed Rs 38 lakh crore with total investments of Rs 36.8 lakh crore and a life corpus of Rs 34.4 lakh crore at the end of March, two months earlier. was said. In the year ended March 2020, it had a net worth of less than Rs 32 lakh crore, total investment of Rs 30.7 lakh crore and a life corpus of Rs 31.1 lakh crore.

“A part of the IPO will also be earmarked for policyholders,” chairman MR Kumar told ET in November. “For the first time, customers will have a part of the shares reserved for them. There are 60 million demat accounts in the country and we have 250 million customers. Hence LIC IPO has the potential to expand the entire capital market – if three-four new ones Customers come and open the demat only for LIC IPO, they will not stay on LIC only.”

Yatin Singh, Head, Emkay Global Investment Banking said, “LIC is a contra investor – their profitability over the last two years is excellent. It will be an attractive bet with rational pricing.”

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