With the government looking to file the DRHP for the LIC initial public offering (IPO) by January next year, MR Kumar, Chairman, LIC India said preparation are in full swing and believed the timelines would definitely get honoured.
When asked who exactly owns LIC, he said, “I don't think I will be able to tell you exactly but then basically, it's a government enterprise. All our policyholders are its stakeholders."
So, post listing would the proceeds still go to the policyholders, and would the policyholders also become shareholders, Kumar said, “I don't know. Once the listing happens, we will know for sure. Anyone can apply for the IPO and preparations are on but certain things have not been decided. So I will not be able to tell you more about that. “
On LIC’s embedded value, Kumar said, the process is on and the embedded value will come through a month's time from now, and after that, the DRHP process will start. Then the process of the IPO will take place.
When asked if they would look at higher dilution than 5 percent, Kumar said it was for the government to decide. Probably the call will be taken by the government once the valuation happens.
Talking about the IRCTC fiasco, Kumar said, “I wouldn't be able to comment on individual stocks. But it is a fair point that a good PSU company would continue to do well. In fact, I don't see any differentiation between PSU and private companies, the way things are changing across the PSU landscape. I am sure that many PSU stocks are going to do well.”
However, Kumar is confident that LIC over the next few years would retain its dominant position and its market share. “LIC is the only corporation in the insurance sector across the globe, where we have really competed over the private insurance players. For quite some time now we have gained market share, we have retained market share. Going forward, I believe that we will be able to do extremely well. Even post listing, there are a lot of things that we are planning to do and I am sure that we will be able to compete and grow our market share in the years to come,” he added.
Talking about booking gains in the market, he said,” In FY20-21 things changed over a period of time, post-pandemic, stocks recovered wonderfully well, it has been going up steeply, but now I believe that the market is also going to look at the stock-specific valuations and for LIC, we are long term players and not into buying/selling on a short term basis, but we will certainly look to make gains wherever they are possible. Going forward, we would like to improve upon our last year's performance."
For the full conversation, watch the accompanying video