Budget 2020: Making a big announcement in her Budget speech, Finance Minister Nirmala Sitharaman said the government will sell a part of its stake in Life Insurance Corporation (LIC) through an Initial Public Offering (IPO). At present, the government owns the entire 100 per cent stake in Life Insurance Corporation of India (LIC).
Finance Minister Nirmala Sitharaman on Saturday said insurance behemoth LIC will be listed as part of the government disinvestment initiative.
"Listing of companies on stock exchanges disciplines the 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," said Sitharaman.
"The government now proposes to sell a part of its holding in the Life Insurance Corporation (LIC) by way of initial public offering (IPO)," she added.
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She further said that the listing brings in more financial discipline among the entities. The government proposes to sell a part of its holding in LIC through initial public offer, she said while unveiling Budget 2020-21.
LIC, fully owned by the Indian government, is typically a big investor in share sales, including IPOs of state-run companies.
This could be the country's biggest initial public offering in recent times, the government will list Life Insurance Corp of India in the next financial year starting April.
The proposal to list LIC is something which will be a big ticket disinvestment proposals to push revenues of the government.
The current year disinvestment could not go beyond Rs 18000 crore. The listing of the company 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, an official said.
India's largest life insurer LIC's surplus for 2018-19 increased 9.9 per cent to Rs 532.14 billion. This was the first time that LIC's surplus crossed the 500-bln-rupee mark.
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