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LIC IPO: HRHP filed, govt to offload 316mn shares in India's largest public issue

LIC’s embedded value, a key metric for insurers that combines the current value of future profits with the net value of assets, is pegged at ₹5.4 trillion ($72 billion)




Prime Minister Narendra Modi’s government plans to sell a 5% stake in the initial public offering of state-run Life Insurance Corporation of India, in what’s set to be the country’s largest sale.

The administration will sell about 316 million shares in the wholly owned insurer, according to a draft prospectus filed with the market regulator Sunday. LIC’s so-called embedded value, a key metric for insurers that combines the current value of future profits with the net value of assets, is pegged at ₹5.4 trillion ($72 billion).


India wants to complete the mega-IPO by the end of the financial year in March to help bridge a gaping budget deficit. The sale, touted as India’s Aramco moment in reference to the Gulf oil giant’s $29.4 billion listing, will test the depth of India’s capital markets. It will also evaluate global appetite for what some consider the state’s crown jewel while others question the autonomy of an institution regularly pressed into service to rescue teetering banks and public sector companies.



LIC is a household name in India. With 2,000 branches, more than 100,000 employees and about 286 million policies, the Mumbai-headquartered company reaches practically every corner of the country. The 65-year-old firm has nearly $530 billion in assets and 250 million policy holders and makes up almost two-third of the market.

As much as 10% of the shares being offered will be reserved for policy holders, and another 5% for employees. New shares won’t be offered, confirming details reported by Bloomberg earlier.

Bankers will now conduct roadshows to woo international investors. While the prospectus didn’t provide a target, India needs to raise about 600 billion rupees ($8 billion) to meet budget estimates from asset sales.



The operator of digital payments app Paytm currently holds the record for the nation’s biggest IPO after raising $2.5 billion in a November listing.

LIC’s profit rose to ₹1,440 crore ($191 million) in the six months to September, from ₹6.14 crore in the same period a year ago.






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