RIYADH: The long-awaited initial public offering of India’s largest life insurance group is expected to raise up to $8 billion, eagerly anticipated by the Indian government under pressure to revive its flagging economy.
Bankers leading the offering for the Life Insurance Corporation of India, includingGoldman Sachs, Bank of America, and Citigroup, said it could generate between $6 billion and $8 billion, according to the Financial Times.
Proceeds from the deal of at least five percent of state-run Life Insurance Corp. will be used by the government to finance the ongoing year’s fiscal spending target.
The FT reported one banker saying the government would use money from the IPO to lower the deficit 0.2 to 0.3 percent, but that revenues would need to come in before the end of the fiscal year at the end of March.
The move to pursue this mega IPO comes as the pressure mounts on the government to fuel growth of more than 8 percent annually.
With such a step, the government has “to show their political commitment to investors, to everybody, that they are getting [the LIC flotation] across the line, with a reasonable raise,” said co-head of equities at a Mumbai-based investment bank.
