LIC woos global investors for IPO via roadshows

BUSINESS DESK: A day after filing the draft red herring prospectus, Life Insurance Corporation of India (LIC) has commenced formal roadshows with big-ticket global investors, seeking their participation in the country’s largest public issue to date.

Capital Group, Aberdeen Asset Management, California University Endowment, Abu Dhabi Investment Authority (ADIA) and Govt of Singapore Investment Corp are among the funds that participated in Monday’s investor road shows, bankers and finance ministry officials told ET.

Three Canadian pension funds, Standard Life, HSBC MF and Franklin Templeton, also participated in the formal road shows being held virtually due to Covid-imposed restrictions.

Some of the top domestic institutional investors are also participating in the roadshows, sources said.

“We have launched road shows formally now, although informal conversations have been happening for some time. Being the biggest high-profile share sale, we need to be 100 percent sure about the participation,” said one of the sources cited above.

“Considering the current market fall and less time available for the IPO we wasted no time to lauch roadshows.”

The government is aiming to raise up to $10 billion (About Rs 75,000 crore) through the LIC IPO, which is also seen as crucial to New Delhi’s divestment target to meet fiscal deficit goals for FY22.

The government will sell 5% in the public issue and around 316 million shares are to be sold, according to the offer document filed with the market regulator.

ADIA declined to comment on the matter. Other individual investors and LIC did not immediately respond to ET’s queries.

The Indian government on Sunday filed the draft prospectus with the capital-markets regulator for the much-awaited public issue of LIC.

Ten banks, including JP Morgan, Goldman Sachs, Bank of America Securities, SBI Capital Markets, Kotak Mahindra, Citi Group, Axis Bank, Nomura, ICICI Securities and JM Financial, are managing the share sale.

The IPO would be a 100 per cent Offer for Sale (OFS) by the government of India, and no fresh issue of shares will be made by LIC, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said on Sunday.

Up to 60 per cent of the QIB portion will be allocated to anchor investors, while a third of the anchor investor portion will be reserved for domestic mutual funds, the draft offer document showed.

For investors and market participants investing in LIC means investing in the growth of India,” said Shivam Bajaj, director at Bajaj Consultants. “The LIC IPO symbolizes a new age of diversified capitalism in India.

(The Economic Times)