New Delhi: Listing of insurance behemoth Life Insurance Corporation (LIC) may be done in the second half of the next financial year, Finance Secretary Rajiv Kumar said on Sunday.
Finance Minister Nirmala Sitharaman while presenting the Budget 2020-21 on Saturday announced stake sale in LIC through an initial public offer in the next fiscal.
There are a number of processes that have to be followed for the listing and some legislative changes would also be required for the listing of LIC, Kumar said.
"We will follow the extant procedure for 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," he said.
Listing of LIC will bring in greater transparency, public participation and also deepen the equity market, he told PTI in an interaction.
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Asked about the quantum of dilution, Kumar said, it could be 10 per cent but no decision has been taken so far.
The government aims to garner Rs 90,000 crore from the listing of LIC and stake dilution in IDBI Bank in the next fiscal out of total disinvestment target of Rs 2.10 lakh crore.
The government currently owns 100 per cent in LIC, while it holds around a 46.5 per cent stake in IDBI Bank.
"Listing of companies on stock exchanges discipline a company and provides access to financial markets and unlocks its value. It also gives an opportunity for retail investors to participate in the wealth so created. The government now proposes to sell a part of its holding in LIC by way of Initial Public Offer (IPO)," the Finance Minister had said in her Budget speech.
Market participants are quite bullish about LIC and said it could be "IPO of the decade" akin to the Saudi Aramco listing.
The 60-year-old state-owned firm, LIC, is the country's largest insurer, controlling more than 70 per cent of the market share. The insurer has a market share of 76.28 per cent in a number of policies and 71 per cent in first-year premiums.
LIC has many subsidiaries including IDBI Bank. It acquired a controlling stake in IDBI Bank last year.
LIC staff to hold one-hour strike on Feb 4 against IPO move
LIC of India employees will hold a nationwide one-hour strike on February 4 in protest against Union Finance Minister Nirmala Sitharaman's budget proposal to sell a part of the Central government's holding in the state-run financial institution.
"We will hold a one-hour nationwide strike on Tuesday from 12.15 to 1.15 p.m. We will stage a demonstration in all our offices also then," Life Insurance Employees Association's Kolkata division Vice President Pradip Mukherjee told IANS.
"We will then hit the streets to protest and resist the step. We will also go to all the MPs," he added.
From Agencies
