Govt may cut LIC IPO size to Rs 30,000 cr, half of earlier estimate: Report
The state-owned insurance behemoth is now valued at around Rs 6 lakh crore, significantly lower than the government's earlier estimates, after feedback from investors, the report added.
- Apr 22, 2022,
- Updated Apr 22, 2022 1:50 PM IST
The Indian government is planning to raise about Rs 30,000 crore ($3.9 billion), half of what it had earlier estimated, from selling a stake of just over 5% in Life Insurance Corporation of India (LIC), a government source told Reuters.
Despite the halving of the government's fundraising goal, it would still be India's biggest IPO to date.
The state-owned insurance behemoth is now valued at around Rs 6 lakh crore, significantly lower than the government's earlier estimates, after feedback from investors, according to the source, who declined to be identified as the discussions were confidential.
Earlier government estimates had called for the insurer to be valued at around Rs 17 lakh crore.
The government will need to seek fresh regulatory approval for the listing process, the source added.
The finance ministry did not immediately respond to an email requesting comment.
Keen to replenish state coffers, Prime Minister Narendra Modi's administration had initially wanted to list LIC in the last financial year that ended March 31 but had to delay the sale after Russia's invasion of Ukraine triggered a market rout.
The 66-year-old company dominates India's insurance sector with more than 280 million policies. It was the fifth-biggest global insurer in terms of insurance premium collection in 2020, the latest year for which statistics are available.
It is also the country's largest domestic institutional investor and investors have been concerned that LIC's investment decisions, including those in loss-making state companies, could be influenced by government demands.
($1 = 76.3510 Indian rupees)
The Indian government is planning to raise about Rs 30,000 crore ($3.9 billion), half of what it had earlier estimated, from selling a stake of just over 5% in Life Insurance Corporation of India (LIC), a government source told Reuters.
Despite the halving of the government's fundraising goal, it would still be India's biggest IPO to date.
The state-owned insurance behemoth is now valued at around Rs 6 lakh crore, significantly lower than the government's earlier estimates, after feedback from investors, according to the source, who declined to be identified as the discussions were confidential.
Earlier government estimates had called for the insurer to be valued at around Rs 17 lakh crore.
The government will need to seek fresh regulatory approval for the listing process, the source added.
The finance ministry did not immediately respond to an email requesting comment.
Keen to replenish state coffers, Prime Minister Narendra Modi's administration had initially wanted to list LIC in the last financial year that ended March 31 but had to delay the sale after Russia's invasion of Ukraine triggered a market rout.
The 66-year-old company dominates India's insurance sector with more than 280 million policies. It was the fifth-biggest global insurer in terms of insurance premium collection in 2020, the latest year for which statistics are available.
It is also the country's largest domestic institutional investor and investors have been concerned that LIC's investment decisions, including those in loss-making state companies, could be influenced by government demands.
($1 = 76.3510 Indian rupees)