GIC Pte, ADIA and Norway Sovereign Wealth Fund to invest in LIC IPO

Sovereign wealth funds from Norway, Singapore and Abu Dhabi have committed to be anchor investors in the initial public offering of Life Insurance Corporation of India, according to people with knowledge of the matter.

Norges Bank Investment Management, GIC Pte and Abu Dhabi Investment Authority will be among the anchor names due to be announced Monday, the people said, asking not to be identified before an official announcement.

Representatives for ADIA, LIC and Norway’s wealth fund declined to comment. A message and call to GIC weren’t immediately answered outside of business hours in Singapore Thursday. An Indian Finance Ministry spokesperson couldn’t be reached for comment.

LIC’s IPO, which had previously been touted as India’s Aramco moment in reference to Gulf oil giant Saudi Arabian Oil Co.’s $29.4 billion listing in 2019, will test the depth of India’s capital market. While Prime Minister Narendra Modi’s government has slashed its fundraise goal by 60% -- as the war in Ukraine eroded investor appetite -- the offering will still be the nation’s biggest.

What Bloomberg Intelligence Says: 

“The low valuation multiple of India’s largest state-owned life insurer, Life Insurance Corporation, and a reduced offer size could allow its listing to attract decent bids... The lower valuation vs. smaller listed peers is within our expectation due to LIC’s lagging new-business margin, less diversified products and fewer sales channels.” - Steven Lam, analyst, and Nitin Chanduka, strategist

The LIC IPO aims to raise as much as 210 billion rupees ($2.7 billion) by pricing shares between 902 rupees to 949 rupees each. Firms in India have raised about $1.1 billion through IPOs this year, data compiled by Bloomberg show. That’s less than half of the nearly $3 billion raised in the same period in 2021.

The offering runs May 4-9 for other investors.