Life Insurance coverage Corporation's IPO may not arrive this fiscal as its assessment is taking timeNew Delhi: Government is unlikely to come up with the much waited for initial public offer (IPO) of Life Insurance Coverage Corporation (LIC) in the present fiscal year ending March 2022, as the valuation of the state-owned behemoth is taking more than prepared for time, and preparatory work is still far from complete.Secretary in the department of investment and public asset management (DIPAM) Tuhin Kanta Pandey nevertheless mentioned that the LIC IPO is quite on course.There are still some issues that require to be resolved with regard to the assessment of LIC, a senior authorities of among the merchant lenders said.Even after the appraisal, there are a number of regulative procedures that have actually concluded, the official said.The authorities added that the IPO requires vetting not just by the Securities and Exchange Board of India (SEBI) but likewise the Insurance coverage Regulatory and Advancement Authority of India (IRDAI) that has been headless for practically 7 months.DIPAM Secretary Tuhin Kanta Pandey in a tweet expressed self-confidence that IPO strategies of LIC is on course and it would take place in the January-March quarter of 2021-22.
It is reiterated that the strategy is on course for the IPO in the last quarter of this fiscal, Mr Pandey tweeted.Valuation of LIC is a complex procedure since of its size, item mix, real estate properties, subsidiaries and success sharing structure, and the size of share sale depends on the evaluation, another main said.Given the variety of regulative procedures to be satisfied, the authorities said it would be tough to meet the deadline of the 4th quarter of the existing fiscal by any stretch of imagination.The government is banking on the listing of LIC IPO and Bharat Petroleum Corporation Limited (BPCL) tactical sale for fulfilling its disinvestment target of Rs 1.75 lakh crore.Recently, speaking about disinvestment, Finance Minister Nirmala Sitharaman had stated the federal government is advancing well.
The tying up of loose ends amongst bureaucracy and various departments consumes its own time and that is what we are attempting to accelerate, she had said.The Cabinet Committee on Economic Affairs (CCEA) had actually in July given its in-principle approval for the listing of LIC.
The government has currently designated 10 merchant lenders for the transaction.To facilitate the listing of LIC, the federal government previously this year made about 27 modifications to the Life Insurance Corporation Act, 1956.
As per the modification, the main government will hold at least 75 per cent in LIC for the first 5 years post the IPO, and subsequently hold at least 51 per cent at all times after five years of the listing.The authorised share capital of LIC shall be Rs 25,000 crore divided into 2,500 crore shares of Rs 10 each, based on the amended legislation.
Approximately 10 per cent of the LIC IPO issue size would be scheduled for policyholders.In her Budget Speech 2021, Ms Sitharaman had said the IPO of LIC would be released in the fiscal year beginning April 1, 2021.
Presently, the federal government owns 100 per cent stake in LIC.