India’s Life Insurance Giant Isn’t Covered Against Pitfalls of Government Ownership

Life Insurance Corporation of India will hit the markets in May in the country’s largest ever public listing, albeit at a much cheaper price than initially expected. A dominant player with a loyal customer base across India may seem like a good bargain in turbulent times, but investors must take into account the baggage of government ownership.

With no end in sight to rocky market conditions, India’s central government has decided to push ahead with the listing of the state-backed behemoth by sharply slashing the size of the public offering. The Indian government will sell a 3.5% stake in LIC, according to the final prospectus filed with exchanges on Tuesday, raising as much as $2.74 billion at the top end of the price range. The previous plan was to offer a 5% stake for about $8 billion.