The market is abuzz today with one positive development. Want to know what it is?
Well, the government-run Life Insurance Corporation of India (LIC) has filed draft papers to sell 5% of its shares.
The papers have been deposited with the market regulator in a bid to raise nearly $8 billion.
The move seems to have dwarfed the biggest IPO in third-largest economy of Asia by a great margin.
It is crucial for the Indian PM Narendra Modi-led government’s efforts to meet sharply trimmed divestment target in the current financial year. It will also provide a measure of the success of the pro-market policies of the government.
According to the draft prospectus filed on Sunday, India’s largest insurer will sell 316.25 million shares. It will amount to nearly 5% of the post-offer paid up share capital.
An embedded value of 5.39 trillion Indian rupees ($71.56 billion) was also stated in the filing. It is a measure of future cash flows in life insurance companies. This is an important financial gauge for insurers.
The government may raise around Rs 600 billion ($7.97 billion) from the issuance and not Rs 900 billion, which was the target of the initial plan as it has trimmed the offering due to market conditions, Reuters reported, citing a government source.
By the end of March, the listing may get completed, the source added.
(With inputs from agencies)