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New Delhi: The finance ministry on Monday invited bids from actuarial firms for arriving at the embedded value of Life Insurance Corporation (LIC) ahead of its stake sale. The government plans to sell minority stake in the insurance behemoth and list it on the bourses. It has already appointed Deloitte and SBI Caps as pre-IPO transaction advisors.
In the bid notice, the Department of Investment and Public Asset Management (DIPAM) said LIC needs to develop an Indian Embedded Value (IEV) reporting framework for necessary disclosures for the proposed Initial Public Offering (IPO).
Embedded value is a common valuation measure used to estimate the consolidated value of shareholders' interest in an insurance company.
The Request for Proposal has been issued to seek proposals / bids from reputed and eligible actuarial firms to work with LIC to "develop IEV in line with the requirements of the relevant Acts and regulations, Actuarial Practice Standards and guidance notes issued by the Institute of Actuaries of India and LIC Act, 1956, and to provide support during the IPO process", it said.
The last date for submission of bids is December 8.
The government has budgeted to collect Rs 2.10 lakh crore from stake sales this fiscal. This include Rs 1.20 lakh crore from CPSE disinvestment and Rs 90,000 crore from selling stake in financial institutions.
So far this fiscal, the government has been able to mop up Rs 6,138 crore from CPSE disinvestment.
In the bid notice, the Department of Investment and Public Asset Management (DIPAM) said LIC needs to develop an Indian Embedded Value (IEV) reporting framework for necessary disclosures for the proposed Initial Public Offering (IPO).
Embedded value is a common valuation measure used to estimate the consolidated value of shareholders' interest in an insurance company.
The Request for Proposal has been issued to seek proposals / bids from reputed and eligible actuarial firms to work with LIC to "develop IEV in line with the requirements of the relevant Acts and regulations, Actuarial Practice Standards and guidance notes issued by the Institute of Actuaries of India and LIC Act, 1956, and to provide support during the IPO process", it said.
The last date for submission of bids is December 8.
The government has budgeted to collect Rs 2.10 lakh crore from stake sales this fiscal. This include Rs 1.20 lakh crore from CPSE disinvestment and Rs 90,000 crore from selling stake in financial institutions.
So far this fiscal, the government has been able to mop up Rs 6,138 crore from CPSE disinvestment.
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2 Comments on this Story
 | Ramkrishna Datta38 minutes ago The NDA government seems to be in an indecent haste to hand over LIC,the most successful and efficient public sector financial institution,to the private monopoly capital. The argument that disinvestment is not privatisation is deceptive. In fact,disinvestment is an euphemism for privatisation and it is the first step towards privatisation.LIC is a capital-rich financial institution and doesn't need to issue IPO for raising capital from the share market. It is one of the key resources for financing government spending particularly in infrastructure and social sectors. LIC's glorious contributions to the economic development of our country can neither be ignored nor brushed aside by the votaries of privatisation. LIC has all along protected the safety of policyholders' money and also ensured decent returns to the policyholders. In the area of claim settlement,an important measure of efficiency of an insurance company,LIC has set an international standard which other private insurance companies can emulate.It is not for nothing LIC has been retaining the market leadership in the insurance sector since the opening up of this sector. The insuring public views LIC as the most-trusted brand. If the government wants to reduce the fiscal deficit it should tax the super rich ìnstead of trying to kill the goose that lays the golden eggs. |
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