India seeks approval to sell 5% stake in LIC’s mega IPO, draft prospectus shows

India plans to sell a 5 per cent stake in the initial public offering of state-run Life Insurance Corporation of India, in what’s set to be the country’s largest sale.

Prime Minister Narendra Modi’s government will sell about 316 million shares in the wholly owned insurer, according to the draft prospectus filed with the market regulator on Sunday.

LIC’s so-called embedded value, a key metric for insurers that combines the current value of future profits with the net value of assets, is pegged at Rs5.4 trillion ($72 billion).

Modi’s administration wants to complete the mega-IPO by the end of the financial year in March to help bridge a gaping budget deficit. The sale, touted as India’s Aramco moment in reference to the Gulf oil giant’s $29.4 billion listing, will test the depth of India’s capital markets. It will also evaluate global appetite for what some consider the state’s crown jewel while others question the autonomy of an institution regularly pressed into service to rescue teetering banks and public sector companies.

LIC is a household name in India. With 2,000 branches, more than 100,000 employees and about 286 million policies, the Mumbai-headquartered company reaches practically every corner of the country. The 65-year-old firm has nearly $530 billion in assets and 250 million policy holders and makes up almost two-third of the market.

The insurer’s profit rose to Rs14.4 billion ($191 million) in the six months to September, from Rs61.4 million in the same period a year ago.