Life Insurance Corp of India reiterated plans to list in March despite volatile global markets, signalling urgency from the government to mop up inflows.
“We are very keen on having the listing in the month of March,” chairman MR Kumar told reporters on Monday. “We are watching” the markets, he added.
The initial public offering by the state-run insurer – which is set to be India’s biggest – is part of Prime Minister Narendra Modi’s efforts to mop up cash and help rein in a gaping budget deficit for the financial year ending March 31. For almost two years, his administration has been preparing the IPO plan for LIC, which has almost $530bn in assets.
The IPO will test the depth of the nation’s capital markets at a time when volatility in Indian stocks has climbed to almost a nine-month high. Policy tightening by the US Federal Reserve is spooking foreign investors and escalating geopolitical tensions and higher crude oil prices have further dampened sentiment.
The government is looking to raise about 654bn rupees ($8.7bn) by selling a 5% stake in the insurer and the sale is set to run from March 10 to 14 if regulatory approvals are received in time, Bloomberg News reported earlier.
Kumar declined to comment on valuations. “The valuation process is on. The pricing has to be done. Valuation will be decided by the anchor investor and so on,” he said.
LIC has taken logistical steps to tap interest among retail investors. It has linked tax-identifier numbers of about 7mn of its 282mn policy holders to their insurance policies, Kumar said, which will enable them to subscribe for shares.
The giant insurer, with its distinctive blue and yellow logo, is ubiquitous across the country of 1.4bn people. With more than 1.3mn agents, 100,000 employees, 2,000 branches and 1,500 satellite offices, LIC’s assets under management are more than India’s combined mutual fund industry.
The 65-year-old insurer holds nearly two-thirds of market share in India.