According to reports, the policyholders of Life Insurance Corporation of India (LIC) can get really lucky. Finance Minister Nirmala Sitharaman in her budget speech has proposed to launch an IPO of LIC, the country’s largest insurance company. Tuhin Kant Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM) in the Union Finance Ministry, has indicated that a 10 percent quota in LIC’s proposed IPO may be reserved for LIC policyholders. According to him, just as retail investors get a 10 percent reservation in the IPO of a government company, the policyholders of LIC will also get a reservation in the IPO as well.
When will LIC’s IPO come?
The DIPAM Secretary said on Tuesday that the IPO of LIC may come after October this year. The Secretary said that the Central Government has introduced the Finance Bill in Parliament for legislative approval which is necessary to start the process of selling a stake in LIC and IDBI Bank. A separate bill will not be tabled for this, as it has been included in the finance bill itself. An actuarial firm has been appointed for valuation prior to the IPO of LIC. At the same time, Deloitte and SBI Capital have been appointed as pre-IPO advisors as well. The government will sell only 10 percent of its stake in LIC through an IPO. According to an estimate, the government can get a share of more than 90 thousand crore rupees by selling just a 10 percent stake.
Govt. Focusing on Disinvestment…
Modi government is stressing disinvestment. Finance Minister Nirmala Sitharaman in the budget announced that the government has set a disinvestment target of Rs 1.75 lakh crore for 2021-22. Last year, the government had not been able to meet the disinvestment target (Rs 2.1 lakh crore) due to the Covid 19 pandemic.
Govt. To Sell Major Stakes
The Central Government had already started selling its stakes in many companies such as Air India, BPCL, Shipping Corporation of India. In the first phase of getting bids, Air India has been completed, soon the government will start the next phase. At the same time, the government has also received bids for BPCL. The last date for submission of bids for Shipping Corporation of India has been fixed as 13 February 2021. According to DIPAM Secretary, the share sale in BPCL and Air India shall be completed by September.
LIC receives Rs 1 lakh crore premium income in pension,
Life Insurance Corporation of India (LIC) has received a record Rs 1 lakh crore of premium income in the first 10 months of the current financial year in its pension and group plans. LIC said on Tuesday that this is the first time such a huge amount has been received as premium income in any one segment of the LIC. This is the second consecutive year that the segment has received good premium income.
According to the company’s statement, the assets under management in this segment, which manages group plans and retired businesses, is more than Rs 7 lakh crore. Through these schemes, LIC provides employee retirement fund management solutions to companies. Its market share in the new business premium in this segment has gone up around 80 percent.