GIC Pte, ADIA, Norway Sovereign Wealth Fund Likely To Invest In LIC IPO: Report

The much-awaited LIC IPO is going to test the depth of the country’s capital market as the government will offload 3.5 per cent stake in the insurer

LIC has set its IPO price band at Rs 902 to Rs 949 per equity share, and the issue is set to open on May 4. Image: Getty

Source : Getty

New Delhi: The mega initial public offering (IPO) of Life Insurance Corporation of India (LIC) will get committed anchor investors from sovereign wealth funds from Norway, Singapore, and Abu Dhabi, quoting sources, Bloomberg reported.

According to the sources, the state-run insurer on Monday will going to announce names of Norges Bank Investment Management, GIC Pte, and Abu Dhabi Investment Authority (ADIA) as anchor investors.

When the news agency tried to contact representatives for ADIA, LIC, and Norway’s wealth fund, they declined to comment. A message and call from Bloomberg to GIC weren’t immediately answered outside of business hours in Singapore on Thursday. No spokesperson from the finance ministry couldn’t be reached for comment also.

The much-awaited IPO of the insurance behemoth, which had previously been touted as India’s Aramco moment in reference to Gulf oil giant Saudi Arabian Oil’s $29.4 billion listing in 2019, is going to test the depth of the country’s capital market.

The central government has already cut fundraise goal by 60 per cent due to Russia-Ukraine conflict, volatility in the stock market, and high rates of inflation. All these have eroded investors’ appetite. However, this IPO will be India’s biggest listing to date.

According to analyst Steven Lam and strategist Nitin Chanduka from Bloomberg Intelligence, “The low valuation multiple of India’s largest state-owned life insurer, Life Insurance Corporation, and a reduced offer size could allow its listing to attract decent bids... The lower valuation vs. smaller listed peers is within our expectation due to LIC’s lagging new-business margin, less diversified products and fewer sales channels.”

The government will sell 22,13,74,920 shares in the insurer and aims to raise around Rs 21,000 crore.

LIC has set its IPO price band at Rs 902 to Rs 949 per equity share, and the issue is set to open on May 4. For other investors, the offering runs from May 4 May 9.