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(Bloomberg) — India plans to raise as much as $3.3 billion by selling a stake in state-run Life Insurance Corp., as the government seeks to bolster public finances strained by higher oil prices.
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The offer, comprising a minimum sale of 316.2 million shares, or a 2.5% holding, is valued at 120.8 billion rupees ($1.3 billion) at a floor price of 382 rupees apiece. The government also has an option to sell an additional 4% if demand is robust. The base offering was subscribed 87% at 2:00 pm local time.
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The transaction, one of India’s largest offer-for-sale deals, comes as New Delhi grapples with fiscal pressure due to the US-Iran war. The government has buffered citizens from high energy prices by absorbing much of the increase. Selling shares in state-run firms has emerged as an important source of revenue, giving the government headroom to manage its finances.
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Prime Minister Narendra Modi’s administration raised almost $2 billion from share sales in the three months ended June as part of its asset sale target of 800 billion rupees for the 2026-27 fiscal year. That already surpasses the total proceeds from such deals in each of the past three years, data compiled by Bloomberg show.
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Read: India’s Sitharaman Says No Plan to Adjust Budget Numbers for Now
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“Its a good call from the Indian government,” said Gurmeet Chadha, chief investment officer at New Delhi-based wealth manager Complete Circle Wealth. With state-run firms improving profitability and dividend payouts, the government has been proactive with stake sales, he added.
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LIC shares slumped as much as 9.3% in Mumbai after the offer price was priced at a discount of nearly 11% to Monday’s close. Prior to the stake sale announcement, the insurer’s shares had been little changed this year.
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Stories that Bloomberg is following:
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- Alibaba-Backed 3D-Modeling Startup Vast Is Said to Weigh HK IPO
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- Alibaba-Backed 3D-Modeling Startup Vast Is Said to Weigh HK IPO
- Every INC Opens at 294 Yen, IPO at 230 Yen
- Juniper Green’s $189M India IPO Gets 8 Times Demand for Shares
- MV Electrosystems India IPO Gets 189 Times Demand for Shares
- Australian Watchdog Proposes More Flexibility for IPO Marketing
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- MV Electrosystems India IPO Gets 189 Times Demand
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What to watch for in Asia equity capital markets:
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Wednesday, Aug. 5
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- Expected to trade:
- Manipal Health Enterprises (MANIPALH IN) $972 million IPO 21.6 million shares at 560 rupees – 590 rupees each
- IPO lockup expiring:
- Muyuan Foods Group Co Lt (2714 HK)
- Han’s CNC (3200 HK) –
- NSDL (NSDL IN)
- Insight Lifetech (688712 CH)
- Book building end:
- Huaan Jinjiang Close-end Commercial Real Estate Investment Fund (508609 CH) $277 million IPO via Guotai Haitong Securities 700 million shares at 2.67 yuan each
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