New Delhi: The government-managed life insurance company from India’s embedded value (LIC) has been completed in more than Rs 5 Lakh Crore ($ 66.82 billion), a government official who oversees what is expected to become the largest IPO in the country on the day Thursday.
Enhanced Investors Waiting for the Government to indicate Embedded Lic Values - The measure of future cash flows in the Life Insurance Company and the main financial gauge for insurance companies – when he released the initial public offering (IPO) Design of Prospektus, expected in a matter of days.
Although there are speculation about numbers in Indian media – starting from $ 53 billion to as high as $ 150 billion – this is the first time the government, which has 100% LIC, has commented on this problem.
Embedded value will help specify a market assessment of LIC and determine how much money raised the government in flotation.
It will be very important for the government to help meet the divestment target and maintain a fiscal deficit in the examination.
“I would say embedded value can be more than RS 5 Lakh Crore and the company’s value will multiply,” Tuhin Kanta Pandey, Secretary, Divestment Department, told Reuters in an interview.
Many reports have projected LIC market assessment at around four times embedded value.
LIC has a majority share of the life insurance market in India.
The government, who hopes to collect as much as $ 12 billion from selling shares in the IPO, expecting the results will help bridge the gap of this fiscal year deficit.
Pandey said the government plans to issue a draft IPO Prospectus to investors early next week.
The encouragement to the privatization of the Exhibition Minister Narendra Modi cut the divestment target to Rs 78,000 Crore ($ 10.43 billion) in March, from the target budgeted before Rs 1.75 Lakh Crore.
This is a banking on a public offering of the LIC warning to meet the revised target.
So far it collects around Rs 12,000 Crore by selling shares in other companies.
Selling 5% of LIC shares to get that amount can be ideal but the government is also willing to sell as much as 10%, said the government and banking.
Pandey, however, refused to reveal the size of the stake that the government would sell in the first round.
He said after selling National Air Carrier Air India successfully, LIC lists would be the main event for the market, which aims to attract retail investors and build public opinions about privatization.
“This is a Moment of LIC for the market and it will add to the depth,” he said noting that it could help attract more investors to invest in state-run companies.
The list of LICs can make it one of the five largest companies in terms of market close, joining industrial releansi clubs, TCS and HDFC Banks.
LIC is likely not to issue new shares in the primary market and the entire publication is likely to be sold in the secondary market, Pandey said.
“I did not see the need for capital for LIC, it was quite capitalized,” he said, adding LIC to sell its shares at the IDBI Bank in the next fiscal year.
Under the current plan, the government will maintain the majority of its shares in LIC.
Pekkar cannot come below 51% by law and it will be maintained, he said, and even in the 5 years it cannot sell more than 25% of its shares in LIC.
‘LIC embedded value set with more than $ 66.8 billion’
