New Delhi: The Union Cabinet approved up to 20% Foreign Direct Investment (FDI) under the automatic route in LIC's IPO-bound IPO on Saturday in order to facilitate disinvestment of the country's largest insurer, the source said. The government, led by Prime Minister Narendra Modi, made the decision in this regard.

It was on On February 13, that  Life Insurance Corporation submitted draught papers with capital market regulator Sebi for the sale of a 5% stake by the government for an estimated Rs 63,000 crore, paving the way for the country's largest-ever public offering.

The initial public offering (IPO) of around 31.6 crore shares, or a 5% government interest, is expected to take place in March on Dalal Street. Employees and policyholders of the insurance behemoth would be eligible for a reduction off the standard rate.

International actuarial firm Milliman Advisors has estimated LIC's embedded value, which is a measure of the consolidated shareholders value in an insurance company, to be around Rs 5.4 lakh crore as of September 30, 2021, according to the draught red herring prospectus (DRHP).

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