New Delhi: Listing of insurance behemoth Life Insurance Corporation (LIC) may be done in the second half of the next financial year, Finance Secretary Rajiv Kumar said Sunday.
Finance Minister Nirmala Sitharaman while presenting the Budget 2020-21 proposed Saturday to sell a part of government stake in LIC through an initial public offer (IPO) next fiscal.
There are a number of processes which have to be followed and some legislative changes would also be required for the listing of LIC, Kumar said.
“We will follow the extant procedure for listing and for other things including the legislative changes it requires in consultation with the Ministry of Law and that process we already started… listing in the second half of FY21 seems logical,” Kumar informed.
Listing of LIC will help bring in greater transparency, public participation and also deepen the equity market, Kumar stated.
Asked about the quantum of dilution, Kumar said, it could be 10 per cent but no decision has been taken so far.
Later speaking to media Sunday, the finance minister assuaged concerns of policyholders of any breach of sovereign guarantee as ownership stays with the government.
“We have only said an IPO (initial public offer). We have not given complete ownership to somebody,” said Sitharaman.
The government aims to garner Rs 90,000 crore from the listing of LIC and stake dilution in IDBI Bank in the next fiscal out of total disinvestment target of Rs 2.10 lakh crore.
The government currently owns 100 per cent in LIC, while it holds around 46.5 per cent stake in IDBI Bank.
The 60-year-old state-owned firm, LIC, is the country’s largest insurer, controlling more than 70 per cent of the market share. The insurer has a market share of 76.28 per cent in number of policies and 71 per cent in first-year premiums.