By Suvashree Ghosh, Dhwani Pandya and Baiju Kalesh,
India is considering selling about five per cent of the shares it holds in Life Insurance Corp. of India as it prepares to file documents for the country’s biggest initial public offering, according to people familiar with the matter.
The government plans to offer 31 crore shares of the 6.32 crore shares it owns in Life Insurance Corp. of India, and no fresh stock will be issued, the people said, asking not to be identified discussing confidential information. The draft prospectus is expected to be filed this week, they said.
The embedded value of the company is estimated to be about Rs 5.4 lakh core ($72 billion), though officials are still firming up the figures, the people said. The insurer’s board is likely to meet Friday to ratify the decision, one of the people said.
Deliberations are still ongoing and details could change, the people said. Representatives for the company, known as LIC, didn’t immediately respond to requests for comment. A finance ministry spokesman in New Delhi was unavailable for comment.
The first-time share sale by the insurer is part of Prime Minister Narendra Modi’s efforts to mop up cash and help rein in a budget deficit that’s widened in the midst of the pandemic. For almost two years, his administration has been preparing the IPO plan for LIC, which has almost Rs 37 lakh crore ($500 billion) in assets.
A sharp reduction in the government’s asset-sale target for the financial year ending March 31 has sparked speculation that the state will be seeking less than anticipated from the LIC IPO. It had planned to raise about Rs 37K crore ($5 billion) to Rs 97K crore ($13 billion), people familiar with the matter have said earlier. The offer price will be determined through a book-building process.
The operator of digital payments app Paytm currently holds the record for the nation’s biggest IPO after raising Rs 18K crore ($2.5 billion) in a November listing.
LIC appointed six new independent directors to its board, the Press Trust of India reported on February 6.
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