IPO Update: Govt. Weighing 5% Stake Sale in LIC’s Mega IPO says Report

According to persons familiar with the situation, India is considering selling approximately 5% of its stake in a state insurer as it prepares to file documents for the country’s largest initial public offering.

The government plans to offer 316 million shares of the 6.32 billion shares it owns in Life Insurance Corp. of India, and no further stock will be created, the sources said, asking not to be identified discussing classified information. According to them, the draught prospectus will be filed this week.

The people stated that discussions are still ongoing and that details may change. According to them, the company’s embedded value is estimated to be at Rs 5.4 trillion ($72 billion). The share price will be determined through a book-building process, one of the people said, while another person said the insurer’s board is likely to meet Friday to ratify the decision.

Representatives for the firm, known as LIC, didn’t immediately reply to demands for comment. In New Delhi, a spokeswoman for the finance ministry was unavailable for comment.

The insurer’s first-ever share offering is part of Prime Minister Narendra Modi’s efforts to raise funds and assist close a budget deficit that has grown as a result of the outbreak. His administration has been working on an IPO plan for LIC, which has nearly $500 billion in assets, for almost two years.

A steep decrease in the government’s asset-sale aim for the fiscal year ending March 31 has fueled speculation that the state may seek less from the LIC IPO than previously expected. It had hoped to raise $5 billion to $13 billion, according to people familiar with the situation.

After raising $2.5 billion in a November IPO, the operator of digital payments app Paytm now holds the record for the country’s largest IPO.