India's Life Insurance Corp files $8 bln IPO papers

NEW DELHI, Feb 13: State-run Life Insurance Corporation of India (LIC) has filed draft papers with the market regulator to sell 5% of its shares to potentially raise nearly $8 billion, dwarfing the biggest IPO in Asia's third-largest economy by a considerable margin.

The offering is crucial to the Narendra Modi-led government's efforts to meet its sharply trimmed divestment target for the current financial year and will provide a measure of the success of the government's pro-market policies.

India's largest insurer will be selling 316.25 million shares, according to the draft prospectus filed on Sunday, amounting to nearly 5% of the post-offer paid up share capital.

The government could raise a little more than 600 billion Indian rupees ($7.97 billion) from the issuance rather than the initial plan for about 900 billion rupees, having trimmed the offering because of market conditions, a government source said.

The listing is likely to be completed by the end of March, the source added.

The filing also stated an embedded value of 5.39 trillion Indian rupees ($71.56 billion). The embedded value is a measure of future cash flows in life insurance companies and a key financial gauge for insurers.

The IPO is seen as a test of investor appetite for new offerings, with a number of companies that listed last year now trading below their offer prices on concerns over lofty valuations and looming increases to interest rates by global central banks fighting inflationary pressures.

The expected listing also comes against the backdrop of foreign investors pulling out funds from the domestic market.

The life insurance giant, which had more than 105,000 full-time employees at the end of September and counts itself among the top five global insurers, manages more than $500 billion of assets and holds more than 60% of India's life insurance market by premiums.

LIC has more than 280 million policies in force and a report by Brand Finance has put the insurer's brand value at $8.66 billion.

Though the government's scaling back of its privatisation target to $10.5 billion raised uncertainty about the size of the planned LIC offering, government officials have said investors should not assume the revised target points to a smaller than expected IPO for LIC.

India's most recent IPO by a life insurer was in 2017, when HDFC Life Insurance (HDFL.NS) raised $1.3 billion. Its share price has nearly doubled since the listing.

LIC's planned offering will dwarf the record $2.5 billion IPO by payments company Paytm (PAYT.NS) last year. Though Paytm's IPO was then the country's biggest, the shares have since fallen by 58% from its offer price.

Indian companies raised a record $16.6 billion through initial share sales in 2021, 52% more than the previous record high in 2017, Refinitiv data shows.

The LIC listing could make it one of India's five biggest companies by market capitalisation, joining energy to telecoms group Reliance Industries (RELI.NS), software services company TCS (TCS.NS), HDFC Bank (HDBK.NS) and IT giant Infosys (INFY.NS).

State-run companies that completed the previous three biggest such IPOs have lost more than half their market value since listing.

Coal India is trading at about 145 rupees a share, a far cry from its listing price of about 350 rupees in 2010.

Similarly, state-run insurers General Insurance Corp (GENA.NS) and New India Assurance (THEE.NS) are trading at a little more than 135 rupees per share, less than half their IPO prices.

Government officials said that India will be "very sensitive" while pricing the LIC share issue to ensure decent long-term returns on investment. The price band will be decided in the coming days and roadshows for potential investors will begin shortly.

Goldman Sachs (GS.N), Citigroup (C.N), Axis Capital, Nomura (8604.T) and SBI Capital Market (SBI.NS) along with five other banks are the IPO bookrunners, according to the draft papers.

Facebook Owner Meta Set For $195 Billion Wipeout, Biggest In Market History

NEW YORK, Feb 3: Meta Platforms' one-day crash may rank as the worst in stock-market history.

The Facebook parent plunged 24% in US trading Thursday on the back of poor earnings results, putting it on track to erase more than $200 billion.

At current levels, that's the biggest collapse in market value for any U.S. company. But there's no certainty the losses will hold, especially given the recent volatility that's whipped across technology shares. Markets have swung wildly in recent weeks, with buy-the-dip traders sometimes storming in during the final hours of the trading day.

Still, analysts were bleak in their assessments, pointing out that Meta faces stiff competition from rivals like Tiktok and revenue was far lower than expected. Michael Nathanson, an analyst at brokerage Moffett Nathanson, titled his note "Facebook: The Beginning of the End?"

"These cuts run deep," he wrote. The results were "a headline grabber and not in a good way."

The sheer size of Facebook's collapse illustrates just how tech companies have ballooned in size to become behemoths with unprecedented market power, and the drama that can ensue when they stumble.

Another way of illustrating the decline: Meta's decline would be more than the market value of about 470 of the S&P 500's members.

Twitter, Snap, and Pinterest all traded lower, putting pressure on the Nasdaq 100 Index. Meta traded at $245.72 as of 10:13 am in New York, down from a close of $323 on Wednesday.

Meta's market cap as of the previous close stood at roughly $900 billion. The company makes up one of the original Faang cohort of tech megacaps, including Google's parent Alphabet, Amazon.com, and Apple.

Income Tax Unchanged, 30% Crypto Tax, Infrastructure Push In India's Budget

NEW DELHI, Feb 1: A push for infrastructure and a 30 per cent tax on transfer or sale of digital assets were the highlights of Finance Minister Nirmala Sitharaman's Budget 2022. Income tax rates have been kept unchanged.

The government's total expenditure has been increased by 4.8 per cent to ₹ 39.5 lakh crore.

A 30 per cent tax will apply on income from the sale or acquisition of virtual and digital assets such as cryptocurrency.

Taxpayers can file updated income tax returns within two years in one-time window. There is no change to Income Tax slabs.

The surcharge on long-term capital gains has been capped at 15 per cent.

A Gati Shakti Master Plan for expressways to facilitate faster movement of people and goods. A data centre and energy storage system will be given infrastructure status to provide easy financing to the sector.

A digital rupee will be introduced by the Reserve Bank of India in 2022-23.

5G mobile services will be rolled out in the country within the next financial year.

e-Passports with embedded chips will be launched next year for more convenience to the public. In a big boost to the electric vehicles sector, battery swapping will be introduced.

The GDP is seen to grow by 9.2% -- the quickest rate among major economies -- in the current year, with the government expecting a repeat performance in the next year with an estimated 8% to 8.5% expansion.

Higher spending through the pandemic has brought India on the path to regain its world's fastest-growing major economy title from China in the current fiscal year. The government has the fiscal space to spend money on asset creation, and keep the economy on track for another year of world-beating 8%-8.5% expansion, the Economic Survey said on Monday.

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