LIC bars employees, agents from commenting on mega IPO

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Months before the launch of its mega Initial Public Offering (IPO), the biggest IPO offering ever in the country, the Life Insurance Corporation of India has forbidden its employees from speaking publicly about the IPO. In a letter, the LIC has asked its employees and agents to refrain from making any comments on the pricing, timing or valuation of the offer that is expected to hit the market in the Jan-March quarter this financial year.

According to a Business Standard report, only the chairman and the four managing directors of the insurance behemoth have been allowed to interact with the media till further instructions.

The mega IPO was first announced by Finance Minister Nirmala Sitharaman in 2021. In her budget speech, she said that the IPO offering will be completed within this financial year.

Details of the letter

The letter forbidding LIC employees from talking about the IPO offer, as accessed by the BS, states, “No comment or statement should be made by any official on IPO/IPO size/IPO size/IPO timing/IPO valuations/Futuristic projections in any public forum or in any interaction which is likely to be made public…This will include not talking on such issues in public interactions like Dos/Agent Meetings/Customer meet/Public functions or any public forum.”

The officials have also been instructed not to share or disclose any unpublished data or information of LIC in any public forum and during any public interaction, according to the letter.

“For this purpose, data given in the Annual report, IRDAI related disclosures on LIC website, data published by IRDAI, audited accounts and other disclosures published by LIC will be treated as published data,” the letter mentioned.

According to the BS report, the management of LIC in its communication to its employees underscored the need for its employees and agents to not share any unpublished information, unverified data on social media platforms. Any circulation or forwarding of such unverified, unpublished information will be treated as a violation of these instructions and employees or agents forwarding/sending/giving such information will be held responsible for the violation and appropriate action will follow, the letter warned.

Only M R Kumar, the company’s chairman, and its managing directors— MK Gupta, Raj Kumar, Siddhartha Mohanty and Mini Ipe – are allowed to interact with the media.

Backroom preparations underway

In August, the Cabinet Committee on Economic Affairs (CCEA) cleared the IPO, with a ministerial panel, known as the Alternative Mechanism on strategic disinvestment, started the deliberations to decide the quantum of stake the government will divest.

Last week, 10 merchant banks including Goldman Sachs (India) Securities, Citigroup Global Markets India, and Nomura Financial Advisory and Securities, Axis Capital, BofA Securities, were engaged by the government to manage the IPO.

Milliman Advisors LLP was appointed to assess the embedded value of the insurance behemoth in the run-up to the IPO.