The embedded value of Life Insurance Corporation of India (LIC) has been finalized at over ₹5 trillion ($66.82 billion), a government official overseeing what is expected to be the country’s biggest IPO, said on Thursday. .
Investors are waiting for the Center to pinpoint the embedded value of LIC – a measure of future cash flows in life insurance companies and the key financial gauge for insurers – when it issues the initial public offering (IPO) draft prospectus, Which is expected in a few days.
While there has been speculation in the Indian media about the number – from as low as $53 billion to $150 billion – this is the first time the government, which has 100% ownership 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 floatation. This will be important for the government to help it meet its disinvestment targets and keep its fiscal deficit under control.
Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM), said, “I would say the embedded value could be more than ₹5 trillion.”
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