LIC IPO: Government will reduce stake from LIC to 10 per cent, not 10!

By bringing an IPO of the country’s largest LIC company, the government is fully engaged in crossing its sinking waters. For this, it is willing to sell up to 25 per cent stake, not 10. At the same time, there is also a proposal to give discounts to retail investors along with bonuses. In fact, the Department of Financial Services has prepared a draft to sell the entire stake of LIC. According to the media report, apart from SEBI, IRDA and NITI Aayog, this draft has been sent to all the ministries.

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Not 10, but 25 percent government stake will be reduced

In fact, LIC has received a much larger setback in the Corona era. Earnings are closed. It has become difficult even to extract the expenses of his kingdom. At the same time, the welfare schemes which have been said to be implemented in this period also need money to fulfill them. Therefore, the government appears to be in a mood to raise Moi money through LIC’s IPO. Under which the government is thinking of reducing the share of the entire quarter by 10, rather than LIC.

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Share will be reduced in many phases

However, the government will reduce the stake by 10 percent in the first phase. After that, the stake will be reduced in several rounds. According to the information, retail investors can be given an interest in selling a stake in LIC. For this, a discount of 10% is being planned. This discount will be available only to investors who are employees of LIC. 5% shares can be reserved for retail investors and employees. Which will be decided in the cabinet meeting. At the same time, bonus shares can also be provided in the initial days.

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Changes in the act

The government has also made changes in the LIC Act, 1956 to reduce its stake from LIC. The foundation of LIC was laid under this act. As per information, LIC does not operate under the Companies Act. It has been treated like an autonomous body from the beginning. After approval from the Cabinet, it will be introduced in Parliament as a proposal.