LIC: Govt may seek proposals from investment banks for mega IPO in June

An offering could happen as soon as March 2022, say sources

India is planning to ask for proposals from investment banks this month for the initial public offering of Life Insurance Corp. of India, according to people familiar with the matter.

The government will send out invitations in the coming weeks for the share sale of the country’s biggest insurer, said the people, who asked not to be identified as the discussions are private. An offering could happen as soon as March 2022, the people said.

Prime Minister Narendra Modi’s government is keen to go ahead with LIC’s IPO -- potentially India’s biggest -- 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 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., which is currently India’s largest listed company with a market value of about $199 billion.

LIC had total assets of 32 trillion rupees ($439 billion) in the financial year 2019-2020, according to its latest annual report. The insurer had an almost 69% market share in life insurance in terms of total first year premiums.

Deliberations are ongoing and details of LIC’s listing plans could still change, the people said. A representative for the finance ministry declined to comment.