India Approves Sale of Nation’s Biggest Insurer in Mega IPO
File photo of the LIC building at Nariman Point. 

India Approves Sale of Nation’s Biggest Insurer in Mega IPO

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.

India Renames Top Job at Life Insurance Corp to CEO Ahead of IPO

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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