India Pushing For $203 Billion Valuation For LIC
NDTV
India is pushing for a valuation of about Rs 15 lakh crore ($203 billion) for a state-owned insurer thats soon expected to file for the nations biggest initial public offering, people familiar with the matter said, even as arrangers awaited a final report on the firms estimated worth.
India is pushing for a valuation of about Rs 15 lakh crore ($203 billion) for a state-owned insurer that's soon expected to file for the nation's biggest initial public offering, people familiar with the matter said, even as arrangers awaited a final report on the firm's estimated worth.
The so-called embedded value of Life Insurance Corp. of India is likely to be more than Rs 4 lakh crore, and its market value could be about four times that amount, the people said, asking not to be identified as the discussions are private. Once the final report is in, the valuation the government is seeking could change.
Embedded value, a key metric for insurers, combines the current value of future profits with the net value of assets. The gauge will be part of LIC's IPO prospectus that's likely to be filed in the week starting January 31. Typically, the market value of insurers is between three and five times the embedded value.
If investors agree with those calculations proposed by the government, LIC would join the league of India's biggest companies -- Reliance Industries Ltd. and Tata Consultancy Services Ltd. -- which have a market capitalization of Rs 17 lakh crore and Rs 14.3 lakh crore, respectively.
