Preparation for LIC’s IPO intensified, FM understood what and where problems can occur.
Finance Minister Nirmala Sitharaman on Friday reviewed the progress made so far in the direction of disinvestment of the country’s largest insurance company Life Insurance Corporation (LIC).
The Finance Ministry said in a tweet that the FM reviewed the progress made towards the Initial Public Offering (IPO) of LIC.
The meeting was also attended by Tuhin Kant Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM), and several senior officials of the Finance Ministry.
The government plans to bring LIC’s IPO by the end of this financial year i.e. March 2021. This could prove to be the biggest IPO in the country.
Preparation for LIC’s IPO intensified: LIC’s IPO is very important.
LIC’s IPO can play a very important role in achieving the fixed disinvestment target of Rs 1.75 lakh crore for the current financial year.
So far, the government has been able to raise only Rs 9,330 crore through stake sales in several PSUs.
In September 2021, the government had appointed ten merchant bankers, including Goldman Sachs, Citigroup, and Nomura, to manage LIC’s disinvestment.
While Cyril Amarchand Mangaldas has been appointed as the legal advisor for the IPO.
Foreign investors will be allowed to increase their stake in LIC.
The government is engaged in deciding the proportion of stake to be put up for sale in this IPO. Apart from this, it is also looking at allowing foreign investors to increase their stake in LIC.
According to SEBI rules, foreign portfolio investors can buy shares in an IPO.
But due to the absence of any provision for foreign investment in the LIC Act, necessary amendments may have to be made for this.
IPO approved in July.
LIC’s disinvestment proposal was cleared by the Union Cabinet’s Committee on Economic Affairs in July. This is considered a major step in the disinvestment process.
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