The Union government on Sunday filed the draft papers for the initial public offering of the Life Insurance Corporation, or LIC, with the Securities and Exchange Board of India.

An initial public offering, or IPO, is a process in which private companies offer shares to the public through issuance of new stocks. At the end of the initial public offering process, the company gets listed on the stock exchange and is allowed to raise capital from public investors.

“The DRHP [Draft Red Herring Prospectus] of LIC IPO has been filed today with the SEBI,” Department of Investment and Public Asset Management Secretary Tuhin Kanta Pandey said on Twitter.

The government will sell more than 31 crore shares of LIC. A part of the initial public offering will be reserved for anchor investors, and up to 10% of the issue size will be set aside for policyholders.

Shares are allotted to anchor investors, who are institutional investors, before an initial public offering opens for subscription.

The LIC IPO is expected to help the government reach its disinvestment target of Rs 78,000 crore.

According to the draft prospectus, LIC’s assets under management stood at Rs 39.6 lakh crore as of September 21.

Assets or funds under management measure the total market value of financial entities which an individual or an institution controls on behalf of the client.

As of 2021, LIC’s market share stood at 66.2% in first-year premium income and 74.6% in the number of policies, according to The Times of India.