Money on the table

LIC is seeking lower valuation

Public sector insurer Life Insurance Corporation (LIC) has opted for an initial public offering (IPO) with a substantial cutback in the number of shares on offer. The draft red herring prospectus (DRHP) filed in February targeted the sale of about 5 per cent stake, with the market purportedly valuing the insurer at 2.5-three times the embedded value (EV)— a standard metric for valuing insurance businesses. The government has now decided to divest a 3.5 per cent stake (about 221 million shares) at a valuation of just 1.1 times the EV and at a price-band of Rs 902-949 per share. Anchor