LIC to list in March, eye on geopolitical impact on mkts – Times of India

Mumbai: Life Insurance Corporation (LIC) of India will seek a listing in March even as it is keeping a watch on the geopolitical situation in Ukraine and its possible impact on capital markets. Addressing the media for the first time after filing the draft red herring prospectus ,DRHP, LIC chairman MR Kumar said that policyholder interests would be taken care of even after increasing the surplus distributed to shareholders to 10% over 3 years from 5%.
“There is no short-changing of policyholders, their interests are fully taken care of,” said Kumar. He added that reducing the share of surplus paid out to policyholders to 90% from 95% would not mean that bonus would come down. “Bonus can also go up depending on whether the performance is better than the assumptions made,” said Kumar.
He said that to calculate the embedded value, the corporation has installed new systems and purchased software, which would make the process of calculating asset share of each product more efficient. Kumar said that the corporation has seen equity gains of around Rs 40,000 crore in October last year. Thus, LIC has surpassed the gains of Rs 37,000 crore made from equity in FY21.
On IDBI Bank, Kumar said that the corporation was keen on retaining stake for strategic reasons as it needed a bank for distribution and infrastructure support. He said that a government announcement on the investment in IDBI Bank was likely to be announced soon and, if that happens, both the bank and LIC Housing Finance could continue to provide home loans separately. This was in the context of the RBI directive that LIC should do home loans either through IDBI Bank or LIC Housing Finance by March 2023.
The valuation of the shares would be determined by the pricing at which the shares will be purchased by anchor investors, said Kumar. “We are keen on a listing in March.” When asked about market conditions given the geopolitical uncertainty arising out of the conflict between Russia and Ukraine, he said, “All I can say is that like everyone else we are watching the situation closely and carefully.”According to Kumar, the corporation had adequate capital. However, after listing if there was a need for growth capital, the corporation could turn to its shareholders for funds. “We are the third strongest global insurance brand with 283 million policyholders with a network of 1.4 million agents. In the last decade, our market share has come down only from 69% to 66%,” said Kumar.
Around 70 lakh customers have already linked their income tax PAN numbers with their policies.