State-run Life Insurance Corporation of India’s (LIC) embedded value has been finalised at more than ₹5 trillion ($66.82 billion), a government official who is overseeing what is expected to be the country’s largest IPO said on Thursday.
Investors are waiting for the Centre to indicate LIC’s embedded value — a measure of future cash flows in life insurance companies and the key financial gauge for insurers — when it releases the initial public offering (IPO) draft prospectus, expected in a matter of days.
While there has been speculation about the number in Indian media — from as low as $53 billion to as high as $150 billion — This is the first time the government, which owns 100% of LIC,has commented on the matter.
The embedded value will help establish the market valuation of LIC and determine how much money the government raises in the flotation. That will be crucial for the government to help meet its divestment targets and keep its fiscal deficit in check.
“I would say the embedded value could be more than ₹5 trillion,” Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM), told Reuters.