Kumar said the idea behind the listing of LIC was to "bring in more transparency and allow the company to share gains with its stakeholders".
The
listing of Life
Insurance Corporation (LIC) will likely take about one year and
the government is not willing to sell more than 10 per cent stake in
the insurance behemoth.
“We
are already in touch with the Department of Investment and Public
Asset
Management (Dipam) to understand all the processes involved.
The LIC Act will have to be amended. It’s not possible to do it in
six months and may take around one year,” Finance Secretary Rajiv
Kumar said in a media interaction on Sunday.
Kumar
said the idea behind the listing of LIC was to “bring in more
transparency and allow the company to share gains with its
stakeholders”. “It is very important as it will bring in the
disclosure norms,” he said.
The
sovereign guarantee for all policies issued by LIC will continue, the
secretary added.
A
top government official said the enterprise value of LIC was roughly
Rs 36 trillion “according to the latest figures in the balance
sheet”. The official said the government might not dilute “more
than 10 per cent” in LIC. “It will certainly be less than 10 per
cent,” the official added.
The
government might seek exemption from the Securities and Exchange
Board of India (Sebi) to offload less than 10 per cent in the initial
public offer (IPO).
All
companies are required to offer at least 10 per cent in the IPO.
Finance
Minister Nirmala Sitharaman had announced a stake sale in LIC through
an initial public offer in the Union Budget of 2020-21.
The
government aims to mop up Rs 90,000 crore from the listing of LIC and
stake sale in IDBI Bank. The government currently owns 100 per cent
in LIC.
On
the stake sale of IDBI Bank, which is substantially owned and
controlled by LIC, Kumar said the government was exploring various
options, including a strategic stake sale. The government currently
holds around 46 per cent in IDBI Bank.
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