The government will reduce its stake in Life Insurance Corporation (LIC) of India through an initial public offering (IPO), Union finance minister Nirmala Sitharaman said on Saturday, as a part of efforts to push through an aggressive disinvestment programme.
The government has set a divestment target of Rs 2.1 lakh crore for FY21 compared with Rs 1.05 lakh crore target for the ongoing financial year. And it has divested Rs 18,094.59 crore so far this year.
“Government will list LIC on the stock exchanges,” Nirmala Sitharaman said in her Budget speech.
The government will list LIC in the next financial year starting April and it could be the country’s biggest initial public offering in recent times.
The current year disinvestment could not go beyond Rs 18,000 crore.
News agency IANS cited an unnamed official as saying that LIC’s listing is going to be complicated as it has huge investments in real estate, art and equity market, which may prove to be time-consuming for valuation purposes.
The employees of LIC, established in 1956 and fully owned by the government, have threatened to go on a flash strike if the Centre announces the listing of the LIC in the Budget proposals.
“There is the possibility of it happening. If the government makes such an announcement, LIC employees will go on a flash strike,” officials of the All India Insurance Employees’ Association (AIIEA) had said on Thursday.
LIC’s surplus for 2018-19 increased by 9.9% to Rs 532.14 billion—the first time that the insurer’s surplus crossed the 500-billion-rupee mark.
