![Government to seek $203 Bn value for LIC in biggest IPO Government to seek $203 Bn value for LIC in biggest IPO](https://varindia.com/storage/news/uploads/2018/02/61e030e93526c.jpg)
The government is looking for a valuation of about Rs 15 lakh crore for a state-owned insurer that is likely to file for the nation’s biggest initial public offering. Once the final report is in, the valuation the government is seeking could change.
The embedded value of LIC is likely to be more than Rs 4 lakh crore, and its market value could be about four times that amount. The final valuation would be decided on the basis of various parameters, including investor appetite, profitability outlook, and trends in the industry.
Embedded value is a key metric for insurers which combines the current value of future profits with the net value of assets. Typically, the market value of insurers is between three and five times the embedded value.
The first-time share sale by the insurer is part of Prime Minister Narendra Modi’s efforts to mop up cash and help rein in a budget deficit that widened in the midst of the pandemic. The government is planning to sell 5% to 10% of the company before the end of March.
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