LIC’S gag order to officials before IPO

Ahead of its mega initial public offering (IPO) expected during the January-march quarter, Life Insurance Corporation (LIC) has asked its officials not to speak in any forum on issues regarding the offer, like size, pricing, timing or valuation.

The insurance behemoth said no official apart from the chairman and managing directors can interact with the media, till further instructions.

Only chairman and managing directors are authorised to speak to the press, it added.

M.R. Kumar is LIC’S chairman, while the four managing directors are MK Gupta, Raj Kumar, Siddhartha Mohanty and Mini Ipe.

“No comment or statement should be made by any official on IPO, its size, timing, valuations or futuristic projections in any public forum or in any interaction, which is likely to be made public,” LIC said in a communication to its officers.

“This will include not talking on such issues in public interactions like agent meetings, customer meet, public functions or any public forum,” the letter, which has been reviewed by Business Standard, said.

LIC, the only governmentowned life insurance company, is the largest life insurance firm, commanding almost 70 per cent market share. It has a huge agent network. It has more than 1.35 million agents as compared to 1.1 million agents of the other 20 private sector life insurance companies. LIC has more than 100,000 employees.

In last year’s Budget, finance minister Nirmala Sitharaman announced LIC’S IPO. And, in this year’s Budget, she put a timeline on the offering, saying it will be completed in the financial year 2021-22.

Last month, the Cabinet Committee on Economic Affairs (CCEA) cleared the IPO proposal of LIC. The ministerial panel, known as the alternative mechanism on strategic disinvestment, will now decide on the quantum of stake to be divested by the government.

The government had said that the potential size of the IPO is expected to be far larger than any precedent in the Indian markets.

Last week, the government appointed 10 merchant bankers, including Goldman Sachs (India) Securities, Citigroup Global Markets India, Nomura Financial Advisory and Securities, Axis Capital and Bofa Securities, among others, to manage the mega IPO. Actuarial firm Milliman Advisors LLP India has been appointed to assess the embedded value of LIC ahead of the IPO.

Only the chairman and MDS are authorised to speak to the press