The dominant player in India’s life insurance market, Life Insurance Corporation, opens its initial public offering for subscription Wednesday in the country’s largest-ever IPO.
The government is selling a 3.5% stake in state-owned insurance behemoth LIC for an estimated $2.74 billion. The corporation will offer about 22.13 million shares for between 902 and 949 Indian rupees, or the equivalent of $11.78 to $12.39 a share at Tuesday’s exchange rates.
Trusted by millions and with enormous reach across the country, LIC is second only to bank deposits as a haven of savings in India. Between 2019 and 2021, LIC’s share of household financial savings grew 3.4 percentage points to 19.4%. That’s ahead of pension funds’ 16.7% share, while bank deposits dropped 7.1 percentage points to 29.4% during the same period.
LIC had a monopoly in India’s insurance market until 2000 and is still the dominant player, commanding about two-thirds of the life insurance market. In the fiscal year ending March 2021, LIC’s market share stood at 64.14%, down marginally from 66.22% in the previous year.
IPO timing
The IPO, initially planned for February, was postponed because of the Ukraine war and the outflow of institutional funds from the stock market. Since January, about $16 billion of foreign capital has left Indian markets. The size of LIC’s offering, which was initially pegged at 5%, was scaled down to 3.5%
[“source=cnbc”]
