The central government may come out with an IPO of Life Insurance Corporation of India (LIC of India) in the next financial year after March 2021. The government says that the company’s IPO is delayed due to four reasons. LIC is the largest life insurance company in the country. In the general budget presented in February this year, Finance Minister Nirmala Sitharaman had announced disinvestment in LIC.
Due to these delays, the government is trying to look at the independent actuarial valuation of the country’s largest insurance company. In such a situation, the initial public offering (IPO) of LIC may slip in the next financial year. Investment and Public Asset Management Department (DIPAM) Secretary Tuhin Kant Pandey said that the work before the IPO of LIC is going on in four phases. These four steps are ‘appointment of consultants to ensure compliance, legislative amendments, changes in LIC’s software to reveal valuations based on internal assets and appointment of actuators to calculate LIC’s actuarial valuation’.
To prepare for the sale, the government plans to amend the Act under which LIC was established. The sale of stake in LIC is important to achieve the target of disinvestment of a record 2.1 lakh crore rupees in the current financial year ending on 31 March next year. Pandey said that only after the completion of these four phases, a decision can be taken on how much stake the government will sell in LIC.
Pandey told PTI, ‘After this, there will be a decision about the IPO and it will be decided how big the IPO will be. All this will happen only when all four phases are completed and we are trying our best to complete them in the current financial year. But this IPO is a big issue and I think it will take time.
He has been appointed consultant
State Bank of India (SBI) Caps and Deloitte has been appointed as a consultant before the IPO. These two are working together with LIC to list compliance issues. The secretary said that the second part is the legislative amendment. For this, Department of Financial Services is working closely with Deepam. Through this amendment, necessary changes will be made in the LIC Act, which will pave the way for IPOs.