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LIC’s listing in second half of next fiscal seems logical: Finance secy
Finance minister Nirmala Sitharaman had said in her budget speech on Saturday that the government plans to sell a partial stake in LIC through an initial public offering (IPO).
The country’s largest insurer and institutional investor, Life Insurance Corporation (LIC) of India, may be listed in the second half of the next financial year, finance secretary Rajiv Kumar said on Sunday, according to PTI.
Finance minister Nirmala Sitharaman had said in her budget speech on Saturday that the government plans to sell a partial stake in LIC through an initial public offering (IPO).
She, however, didn’t say how much of LIC the government plans to sell.
Kumar, according to news agency Press Trust of India, said there are a number of processes which have to be followed for the listing and some legislative changes would also be needed.
“We will follow the extant procedure for the listing and for other things including the legislative changes it requires in consultation with the ministry of law and that process we already started… Listing in the second half of FY21 seems logical,” Kumar was quoted as saying.
The finance secretary said LIC’s listing will bring in greater transparency, public participation and also deepen the equity market, according to PTI.
Kumar said the quantum of dilution could be 10% but no decision has been taken so far.
The insurance giant holds about $433 billion in assets, which is more than the whole of India’s mutual fund industry combined, so even a minuscule sale would be quite large.
India has pencilled in Rs 2.1 lakh crore from asset sales in the year starting April 1, more than double that of the previous year.
The government owns 100% stake in LIC that was set up in 1956. LIC controls more than 70% of the market share. The insurer has a market share of 76.28% in a number of policies and 71% in first-year premiums.
The government aims to garner Rs 90,000 crore from the listing of LIC and stake dilution in IDBI Bank, in which it owns 47.11% stake, in the next fiscal.
LIC has many subsidiaries including IDBI Bank. It acquired a controlling stake in IDBI Bank last year.
