What does the re-filing of the LIC DRHP mean for the likely date of LIC IPO issue?

Let me clarify that the government has not exactly re-filed the DRHP with SEBI. On the contrary, it has only updated its existing filing with SEBI. The current filing had only incorporated financials up to the Sep-21 quarter. However, now that the Dec-21 quarter financials are also available, government has updated the DRHP with the additional details. This makes the draft prospectus more current and more useful for investors.

It may be recollected that the original filing was done by the government in mid-Feb and the approval from SEBI has already come in for the LIC IPO in second week of March. However, the government had decided to put the LIC IPO on hold till the war and oil situation cleared. The filing already done with SEBI was actually sufficient for the IPO to be completed by 12th May. Beyond that would mean updated financials and also fresh actuarial valuations.

It must also be noted that while giving the observations on the IPO, SEBI had insisted that an updated DRHP be filed for LIC incorporating the December quarter financials as soon as the numbers were approved and ready. For the Dec-21 quarter, LIC reported net profits of Rs.235 crore with cumulative profits of Rs.1,672 crore for the first 9 months of FY22. One concern about LIC was that the low level of profits compared to the top line.

That still does not say much about the timing of the LIC IPO as it would predicate on how the macroeconomic headwinds in terms of geopolitical risks, oil prices, currency movements and FPI flows pan out. These will be important decision points. An IPO worth Rs.65,000 crore will not be easy to sell, considering that it would be 3.5 times the largest issue till date. For the government and DIPAM, timing will be the biggest challenge in the LIC IPO.