India’s Largest Insurer Plans First Zero-Coupon Bond Purchase

India’s largest insurer is preparing to buy zero-coupon sovereign bonds for the first time, according to people familiar with the matter, in the latest sign that the country’s financialization is pushing asset managers into new products to boost returns.

State-owned Life Insurance Corporation of India held discussions with large banks this year on buying zero-coupon securities known locally as STRIPS bonds, which are created by separating the principal and interest components of government debt, the people said, asking not to be identified because the talks are private. The talks were held in the past few weeks, the people said.