The Cabinet Committee on Economic Affairs (CCEA) has given its in-principle approval to the initial public offer of Life Insurance Corporation, with the listing of the shares expected by the end of this fiscal.

Officials said the CCEA at its meeting last week cleared the proposal for the mega IPO. A group of ministers headed by finance minister Nirmala Sitharaman would now decide on the amount of stake sale by the Centre and the timing of the issue. They said the government was preparing a timeline that envisages listing by March next year.

At present, the government owns a 100 per cent stake in LIC. Once listed, it is likely to be one of the leading companies by market capitalisation with an estimated valuation of Rs 8-10 lakh crore.

The LIC is working on embedded value, internal efficiency and product restructuring. The actuarial advisers are likely to arrive at the embedded value of LIC by August-end.

The Union budget had proposed 27 amendments to LIC Act, 1956 that was incorporated in Finance Act 2021 with the government gazette notifying the changes.

This paved the way for the 65-year old corporation with over Rs 35 lakh crore assets to corporatise and list its shares on domestic stock exchanges.

Officials said the bids from merchant bankers were likely to be called later in July and regulatory approvals received by November end.

The Centre has picked SBI Capital Markets and Deloitte as the pre-IPO advisers.

The Department of Public Asset Management (Dipam) in January had appointed actuarial firm Milliman Advisors LLP to assess the embedded value of LIC .

The amendments to LIC Act include putting in place a board with independent directors in line with the listing obligations, increasing the authorised capital to Rs 25,000 crore divided into 2,500 crore shares of Rs 10 each.

Amendments have also been done to ensure that Centre will hold at least a 75 per cent stake in LIC for the next five years after listing and at least 51 per cent after that period. Up to 10 per cent of the LIC IPO issue size would be reserved for policyholders.

IDBI stake sale

The government has extended the deadline for transaction and legal advisers to bid for managing the IDBI Bank strategic sale by nine days till July 22.

The Department of Investment and Public Asset Management (Dipam) had on June 22 invited bids from merchant bankers and law firms for managing and giving legal advice for the sale process. The last date to put in bids was July 13.

“The competent authority has decided to extend the bid submission date of the… tender by nine days. The last date of bid submission will now be July 22, 2021,” the Dipam said in a notice.