Behind-The Scenes Preps For LIC IPO, India's Biggest-Ever

In Mumbai's sleek skyscrapers, harried bankers race the clock to appraise a company that hasn't been valued in decades.

In Mumbai's sleek skyscrapers, harried bankers race the clock to appraise a company that hasn't been valued in decades. Bureaucrats burn the midnight oil in New Delhi, working through power cuts to pull together an initial public offering to rival any in Asia this year. And across the hinterland, front-page newspaper ads alert more than 250 million policy holders of the chance to own a piece of a company nearly as old as post-independence India.

For almost two years, India has steeled itself for a gargantuan task: readying the country's premier insurer -- with nearly $500 billion in assets and a valuation estimated as high as $203 billion -- for what could become its biggest-ever stock listing. Some bankers have described the public offering of Life Insurance Corp. of India, or LIC, as India's Aramco moment. As with the Gulf oil giant's $29.4 billion listing, the world's largest, LIC's debut will test the depth of the nation's capital markets and global appetite for its state-owned crown jewel.

Success is far from assured. With about two months to the targeted launch, consultants have been pouring over reams of policy documents to come up with LIC's embedded worth -- a key valuation metric. Bankers say global investors worry about the autonomy of an institution regularly pressed into service to rescue teetering banks and floundering state assets. Local investors are skeptical the 65-year-old firm can compete against up-and-comers.

A knock-out listing could see LIC raise as much as $10 billion from the IPO with a minimum dilution of 5%. That would make it the third biggest globally involving an insurer. More importantly, it would burnish Prime Minister Narendra Modi's reputation as a market-oriented reformer ahead of key state elections and help plug a gaping budget deficit.