NEW DELHI: The Department of Investment and Public Asset Management (DIPAM) has invited bids from actuarial companies to value the state-run insurance behemoth Life Insurance Corp of India Ltd (LIC) ahead of its proposed initial public offering (IPO).
In the tender notice, DIPAM has said that the LIC needs to develop an Indian Embedded Value (IEV) reporting framework for necessary disclosures for the proposed IPO. Embedded value (EV) refers to a common valuation measure used mainly by life insurance companies to estimate the consolidated value of shareholders' interest in them. It is calculated by adding the present value of future profits of a firm to the net asset value (NAV) of the firm's capital and surplus.
The Finance Ministry has issued the Request for Proposal to seek proposals from reputed and eligible actuarial firms to work with the LIC to develop embedded value in line with the requirements of the relevant Acts and regulations, Actuarial Practice Standards and guidance notes issued by the Institute of Actuaries of India and LIC Act, 1956, and to provide support during the IPO process, it said. (IANS)