According to people familiar with the matter, India is considering selling about 5% of its shares in the state insurance company as it prepares to file documents for the country’s biggest initial public offering.
Government plans to offer 316 million shares out of 6.32 billion shares owned by it Life Insurance Corporation of India, and no new stock will be issued, the people asked not to be identified, discussing the confidential information. He said the draft prospectus is expected to be filed this week.
People said discussions were still on and the details could change. The embedded value of the company is estimated to be around 5.4 trillion rupees ($72 billion), he said. One of the people said that the share price will be determined through book-building process, while another person said that the board of the insurer is likely to meet on Friday to confirm the decision.
Representatives of the company known as LIC did not immediately respond to requests for comment. A finance ministry spokesperson in New Delhi was not available for comment.
The first-time share sale by the insurer is part of Prime Minister Narendra Modi’s efforts to shore up cash and rein in the widening budget deficit amid the pandemic. For nearly two years, his administration has been preparing an IPO plan for LIC, which has assets of around $500 billion.
The sharp reduction in the government’s asset-sales target for the financial year ending March 31 has fueled speculation that the state would demand less from the LIC IPO than was projected earlier. People familiar with the matter previously said it planned to raise about $5 billion to $13 billion.
The operator of digital payments app Paytm currently holds the record for the country’s biggest IPO after raising $2.5 billion in November listing.
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