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In India’s Largest-Ever IPO, LIC Plans To Raise $8 Billion

LIC is banking on its popularity in the Indian sub-continent to ensure that the privatisation process goes down smoothly.

In India's Largest-Ever IPO, LIC Plans To Raise $8 Billion

LIC, the Indian state owned life insurance provider, has announced that it will be raising around $8 billion by selling 5% of its shares. In what is set to be India’s biggest IPO to date, a sale of 316 million shares of the country’s primary insurance firm will be witnessed. The current Indian government led by Narendra Modi has been attempting a steady stream of privatization of state owned resources, such as the sale of Indian Airways, and this IPO is part of the same wave.

However, it appears to be taking place at a time when India’s stock market index (Sensex) is performing very poorly. All recent IPOs from PayTM, Zomato, Nykaa, etc. are at their lowest possible, and all government run IPOs have gone down to half their market value. The case is albeit better for LIC, with its embedded value of $71.56 billion, which is of crucial importance to investors.

LIC is banking on its popularity in the Indian sub-continent to ensure that the privatization process goes down smoothly. Not only does the insurance provider have over 2000 branches, 100,000 employees, assets worth $530 million, and $191 million in profits in the last 6 months; but it also has the President of India as the primary promoter of the organization. So, it can be expected that the sale of its shares will take place quickly and without a hitch.

LIC has been operating in India for the past 65 years and has the biggest market share compared to any insurance provider in the country. Headquartered in Mumbai, the firm’s current IPO holders include Goldman Sachs Securities, Kotak Investment Banking, JP Morgan, ICICI Securities, Axis Capital, Bank of America Securities, and SBI Capital Markets.

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