India Approves Sale of Nation’s Biggest Insurer in Mega IPO
(Bloomberg) -- India approved the sale of shares in state-run insurer Life Insurance Corp. of India, a key step in moving ahead with the mega-listing.
The cabinet committee on economic affairs cleared the initial public offering proposal, according to Disinvestment Secretary Tuhin Kanta Pandey. A group of ministers will now decide on various issues related to the proposed offering, he said.
The mega-IPO of the country’s biggest insurer is expected to happen as soon as March 2022. The government, which owns 100% in LIC, will next determine the embedded value of the company to determine the stake sale details, including the amount and price band.
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The sale, potentially India’s largest ever, is key for Prime Minister Narendra Modi’s government to help plug a widening budget gap. The administration plans to raise $24 billion by selling assets including Air India Ltd. and Bharat Petroleum Corp. as it attempts to revive an economy that’s been battered by the coronavirus pandemic.
A listing could value LIC at as much as $261 billion, based on its assets under management and using private sector insurers as a benchmark, analysts at Jefferies India led by Prakhar Sharma wrote in a February note. That would make it bigger than Reliance Industries Ltd., currently India’s largest listed company with a market value of about $199 billion.
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