India is considering seeking about 50,000 crore ($6.6 billion) next month from the initial public offering of state-owned Life Insurance Corp., people familiar with the matter said.
The government is discussing selling up to 7% of the shares in LIC through the listing, according to the people, who asked not to be identified because the information is private. The sources said they aimed to launch the share sale before the current approvals for the offering expire on May 12.
The center is looking into the mid-May schedule for the launch of the massive initial public offering of its largest insurer in the hope that the market volatility caused by the Russian invasion of Ukraine will subside, Bloomberg News It was reported last month, citing people familiar with the matter. The listing forms a major part of Prime Minister Narendra Modi’s administration’s plans to liquidate state assets to fund a huge budget deficit.
The included published value of Life Insurance Corp will be valid for public subscription until May according to the rules. The delay could then mean that the LIC would have to recalculate the implied value, a key valuation metric for insurance companies, based on its most recent financial statements.
With market volatility triggered by the war, what could be the country’s largest initial public offering (IPO) has been pushed back to fiscal year 23, Bloomberg News reported earlier this month.
People said the government and its advisers were considering seeking a valuation of about 1.25 to 1.5 times the implied value of the LIC. The people said officials were still discussing possible terms of the offer, and the fundraising target could still be changed.
A representative of the LIC declined to comment, while calls and an email to a Ministry of Finance spokesperson remained unanswered.
Finance Minister Nirmala Sitharaman announced the initial public offering (IPO) plans for the first time in February 2020, but has been postponed due to the pandemic.