New Delhi: The government encourages an assessment of around Rs 15 Lakh Crore ($ 203 billion) for state-owned insurance companies that are immediately expected to submit an initial public offering of the country (IPO), people who are familiar with the problem, even because the arranger is waiting for the final report on value Estimated company.
What is called the embedded value of the Life Insurance Corporation of India (LIC) is likely to be more than RS 4 Lakh Crore, and the market value can be around four times that number, said people, asking not to be identified as a discussion of personal.
After the final report in, the assessment that the government sought can change.
Embedded value, key metrics for insurance companies, combine future profit values ​​today with net asset values.
Gauge will be part of the IPO LAC prospectus which is likely to be submitted on Sunday starting January 31.
Usually, the market value of insurance companies is between three and five times embedded value.
If investors agree with the calculations proposed by the Government, LIC will join the largest League of India – Reliance Industries and Consultancy Services (which has a market capitalization of RS 17 Lakh Crore and Rs 14.3 Lakh Crore.
A spokesman for the Ministry of Finance did not answer the call looking for comments, while LIC refused to comment.
The government might stretch his hopes a little too far, said two people.
The final assessment will be decided based on various parameters, including investor tastes, profitability prospects, and trends in the industry, they said.
The first stock sales by insurance companies are part of the efforts of Prime Minister Narendra Modi to clean cash and help control the budget deficit that widens in the middle of a pandemic.
The government plans to sell 5% to 10% of the company before the end of March.
The call on the number of shares to be sold will be taken by the minister panel later this month before the CIC Draft Prospectus file with a market regulator.
In the desired assessment of the government, 5% of the shares will take around Rs 75,000 Crore.