Page 12 - Insurance Times May 2022

new business premiums (NBP) to Rs
59,608.92 crore in March 2022, with LIC chairman's term extended by a year
LIC recording 51 percent surge in first- The Centre has extended the term of the incumbent Chairman MR Kumar by one
year premiums. more year. This is expected to ensure continuity at leadership level and provide
comfort to key institutional investors - who are looking to participate in the IPO
In FY22, the life insurance industry's - about stability at the Board level post the IPO and even if the proposed mega
combined new business premium
offering gets delayed beyond March 2022. The Centre also extended the tenure
growth rate was 13 percent year over
of Raj Kumar, Managing Director of LIC, by one year beyond January 31. This is
year, according to data released by
the second extension for MR Kumar, whose term was to end on June 30 last year,
IRDAI.
but was given a nine-month extension until March 13 this year, when he is due to
LIC NBP jumped nearly 8 percent to Rs complete three years as Chairman. Now his term has been extended till March
1.98 trillion for 2021-22. 13,2023, sources said. These extensions has been done as a one time measure
and cannot be quoted as precedent, according to the decision taken by the
"The robust growth in monthly numbers
Appointments Committee of the Cabinet.
can be attributed to an increase in
single premiums for both individual and The Centre is betting big on the mega LIC IPO and targeting to raise about Rs.
group segments in the last month of the 1 lakh crore. A few days back DIPAM Secretary TuhinKanta Pandey had said
financial year (with individuals under- that LIC will list in bourses by March 31 this year. The mega LIC IPO is crucial for
taking tax planning measures)," a meeting the Rs. 1.75-lakh crore disinvestment target set for the current fiscal.
CareEdge report said. The draft papers for the LIC IPO are still being finalised and expected to soon
be filed with SEBI for approval. Being a government company, the approval
LIC substantially outpaced its private process at SEBI is expected to be fast tracked, sources said.
peers for the second month in a row,
with a 63.2 percent share of the first-
year premium pie for the life cover sec- "The 5% limit is still on the table. As per Investment Authority among others, it
tor in FY22. The private sector, with the the demand at the moment, markets added.
remaining 36.8 percent share of the can support about 3.5%, but if it The government wants to confirm their
total NBP, however, continued to gain changes, we can easily increase it to participation from these institutions
market share at a faster clip compared 5%," the official said, asking not to be because they are stable investors with
to LIC, CareEdge report said. named as the proceedings are not in a long-term horizon and have previ-
public domain. ously indicated interest in the public is-
LIC Board approved mini- The government is seeking to garner sue, an official said.
mum 3.5% stake dilution between Rs. 21,000- Rs. 30,000 crore "Many leading sovereign funds ex-
from the sale, at a valuation of Rs. 6 pressed interest in the LIC IPO. Mer-
via IPO, can raise limit to
trillion, the official added. chant bankers are in advanced discus-
5% sions with them for being anchor inves-
The Board of Life Insurance Corpora- Government approaches tors in the issue," the official said.
tion (LIC) of India is learnt to have agreed foreign sovereign, pension During roadshows ahead of the IPO,
on diluting 3.5% stake in the country's touted to be rolled out in May, the Cen-
largest insurer, even as it keeps the 5% funds to be anchor inves- tre has tapped around 180 potential an-
stake dilution as an upward limit, as filed tors in LIC public issue chor investors. Officials told the paper at
in the draft red herring prospectus. least eight to 10 "big-ticket foreign inves-
The Central Government has ap- tors" will be required as anchor investors
A senior official aware of the develop-
ment, the Board in a meeting recently proached the sovereign wealth and for India's largest-ever IPO.
decided on reducing the stake for dilu- pension funds to be anchor investors for "One key consideration is the listing
the upcoming public issue of LIC.
tion, which will be subject to regulatory price and the market capitalisation at
approvals, amid headwinds from vola- These sovereign wealth and pension that level. Anything below Rs 10.7 lakh
tile stock markets and investor inter- funds include the Qatar Investment crore valuation at listing can make in-
est, even as it could dilute up to 5% stake Authority, Singapore-based GIC, three clusion in the MSCI index difficult," they
as stated in the prospectus. Canadian pension funds, the Abu Dhabi said. T

12 The Insurance Times, May 2022