LIC letter forbids employees from commenting on upcoming mega IPO

Only the company's chairman and four managing directors are allowed to comment on the offer expected this financial year.

The Life Insurance Corporation (LIC) has asked its employees not to speak publicly about its mega Initial Public Offering (IPO) and avoid comment on the pricing, timing or valuation of the offer expected in the Jan-March quarter this financial year.

The state-owned insurance behemoth has said only the chairman and four managing directors are allowed to interact with the media till further instructions. 

M R Kumar is the company’s chairman and the managing directors are MK Gupta, Raj Kumar, Siddhartha Mohanty and Mini Ipe.

“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,” LIC said in a communication to its officers.
 

“This will include not talking on such issues in public interactions like Dos/Agent Meetings/Customer meet/Public functions or any public forum,” said the letter, which has been reviewed by Business Standard.

LIC is India’s largest insurance company, commanding almost 70 per cent market share and running a huge agent network. It has more than 13.5 lakh agents as compared to 11 lakh of the other 20 private sector life insurance companies. It has more than one lakh employees.

“The officials shall not share/disclose any unpublished data/information of LIC in any public forum of any public interaction. For this purpose, data given in 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 said.

Finance Minister Nirmala Sitharaman announced LIC’s IPO in 2020 and in this year’s budget she said it will be completed this financial year.

Last month, the Cabinet Committee on Economic Affairs cleared the initial public offering proposal of LIC. The ministerial panel, known as the Alternative Mechanism on strategic disinvestment, will next decide the quantum of stake the government will divest. The government has said the IPO is expected to be far larger than any precedent in Indian markets.

Last week, the government appointed 10 merchant bankers including Goldman Sachs (India) Securities, Citigroup Global Markets India, and Nomura Financial Advisory and Securities, Axis Capital, BofA Securities, among others India 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.

LIC’s letter emphaised on the need for sensitizing employees, agents against sharing any unpublished information, unverified or unpublished data on social media platforms and said any violations of the instructions will invite actions.

“Any circulation/forwarding of such unverified, unpublished information, will be treated as violation of these instructions and employees/ agents forwarding/sending/giving such information will be held responsible for such violation and appropriate action will follow,” the communication said.