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.
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