The blockbuster moment for the capital market of India is here. Life insurance corporation of India is all set to break it again as the life insurer filed its draft red herring prospectus on February 13 just 4 months after 197 communications broke the record for the biggest upcoming IPO offering in India’s history. Insurance corporation of India is all set to launch the life insurers IPO that will see the government sell its 5% stake or 316 million shares in the insurance to the public. It means that the lyc is not an easy company to analyse the given assets myraid as it has a complex distribution network and the cross holding across the public and private sector.
The upcoming LIC IPO offers a guide for navigating your way into the 649 page long draft that the red herring prospectus of the insurance giant has presented.
Summary of the issue
The non numbered first and second page of the hearing carries the most important summary of the entire issue in terms of the amount of shares that are likely to be sold or fresh equity which is to be issued. It contains the identity of the current investors who would be selling their stake in the IPO and how many shares they would be proposing to sell. Furthermore there will be some reservations in the IPO made for the employees or the policyholders who would be found under this page. The company is also here to mention the risks related to the offer and general risks involved In participating in the IPO. At the end you will also see the names of the book running lead managers of the issue and the registrar of the issue.
Pages one to 22
It includes the risk factors involved in participating in the public issue of the life insurance corporation. The risk factors are likely to appraise prospective investors of the different causes and events which will harm the companies business and its ability to remain as a going concern. The part is important for investors to have a better understanding of the risk that the company deals with and the risk that the industry in which the company operates faces.
Pages 67 to 105
As per the market news under this page you will be given a brief introduction to the company its industry the summary of the financial statements and latest objectives of the issue. You will also learn the capital structure of the company and general information including the registered office address.
Pages 106 to 299
On this page is you will get all the information you need to know about the life insurance corporation like the history of the company some corporate matters the management the board and any group companies of subsidiaries lic has besides its dividend policy.
Pages 300 to 503
The pages include detailed tables of the most important statements including the profit and loss balance sheet and the cash flow statement that will allow the number to do all the talking when it comes to introducing investors to the. The section also contains the management discussion of the financial statement of the company like the case of annual reports of the listed entities.
Pages 504 to 546
Under these pages being an investor you can learn about all the legal issues that the company has faced or it is entangled currently like the outstanding litigation against it or those it has filed against other people. Being an investor you can also learn about the different approvals government has granted the company for running the business and regulated disclosures it needs to make under the Sebi guidelines.
Pages 547 and 578
The pages contain all the information related to the public issue the company is likely to propose. Investors can learn about the information that is related to the offer terms and the process to apply in the offer besides some guidelines on the restrictions of foreign ownership in the Indian market etc.
Pages 579 to 581
The pages include a brief introduction to some provisions of the life insurance corporation act that the company has made out for the public which is important to learn.
Pages 582 to 630
It is one of the most and the challenging parts under drhp. Under these pages the investors will learn about the main policy of lic through the embedded value that has been submitted by the independent actuary of the organization. The report will also provide details on the net worth of the company value of Infosys business and the value of new business. The auditor will also suggest you to go through the reports reliance and limitation section and read report in conjunction with the remaining drhp.
Pages 631 to 649
The section includes information about different contracts that lyc has already entered into or it is likely to enter. It could be material for the companies investors. The documents are likely to be available for verification at the central office of the company till the issue is closed.
The entire drhp serves as a guide for an investor to understand the company. If regulatory approvals come in time then the issue will be completed in March itself but due to the global political tensions going on the issue might be delayed after the Russia Ukraine war.