Life Insurance Company of India (LIC) is set to launch the most extensive initial public offering (IPO) in the history of the Indian capital market, worth around Rs 21,000 crore. Assuming the share price is capped at Rs 949 per share, the share sale will start on May 4, which will make the insurer the fifth largest listed company in the country with a market capitalisation of Rs 6.02 trillion. LIC has fixed the price range for the IPO at Rs 902-949 per share.

LIC will also become the fourth largest insurer globally after Ping An, AIA, and China Life, and the fifth largest in terms of total premiums. “Even if the size is reduced by around Rs 21,000 crore, the LIC IPO will still be the largest-ever IPO in the country,” Tuhin Kanta Pandey, secretary of the Department of Investment and Public Asset Management (DIPAM), told the media on Wednesday. The government has reduced its shareholding dilution from 5 per cent of its total holdings to 3.5 per cent.

Among Indian life insurers, LIC will be the fourth listed insurer. It will have a market capitalisation of nearly six times that of second-ranked HDFC Life, valued at Rs 1.16 trillion as of Wednesday. “The decision to go public now considers several factors, including market needs, which include a solid anchor book, stable market conditions, reduced volatility, domestic liquidity, and the company’s financial performance,” Pandey said.

“Domestic demand is strong and foreign demand is weak. So, in this constrained environment we are facing, it is important to exercise proper judgment on the scale of the problem,” he explained in explaining the rationale behind the downsizing of the IPO. time said. “We have committed to not launching any FPO next year,” he added.

However, there are questions about LIC’s valuation. Initially, according to a draft Red Herring prospectus (DRHP), the government planned to sell its 5 per cent stake in the insurer for an expected price of around Rs 65,000 crore, valuing it at over Rs 10 trillion. However, with the dilution rate now down to 3.5 per cent, the government has raised around Rs 21,000 crore – valuing the insurer at 1.1 times its embedded value of Rs 5.39 trillion.