Indian government is reportedly planning to bring in a group of anchor investors to invest up to $3.41bn (INR250bn) in Life Insurance Corporation of India before its IPO.

“We will invite anchor investors after the embedded valuation exercise is done and the pricing for the IPO is ready,” a government official was quoted by financial daily Mint as saying.

The other source told the publication that “there may be more than two dozen anchor investors in LIC’s IPO.”

The official told the daily, “anchor investors will buy LIC’s shares to help measure market demand. They will buy a portion of the shares meant for qualified institutional buyers (QIBs).

“If anchor investors pay a certain amount and the market is ready to pay more than that on the day of IPO, the anchor investors will have to bring in the extra amount to match the market price.”

The state-owned insurer’s board structure will also undergo some changes and adopt new accounting norms before the IPO.

Mint quoted the official as saying, “There will be changes at the constitutional level at LIC. Though we term LIC’s board as a board, there is no prescribed board at LIC as defined under SEBI’s listing norms.

“So, apart from the ongoing actuarial valuation exercise underway at LIC, several other changes will be done at LIC. We are regularly meeting LIC to speed up the IPO process.”

The IPO was first announced by Finance Minister Nirmala Sitharaman during the 2020-21 budget.