India seeks approval to sell 5% stake in LIC

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 yesterday. 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 will test the depth of India’s capital markets. It will also evaluate global appetite for what some consider the state’s crown jewel.