LIC IPO: If you are the insured holder of LIC, then you can get a better chance of earning in its IPO. This is because up to 10 percent of the LIC IPO issue size will be reserved for the insured. Minister of State for Finance Anurag Thakur gave this information in Parliament on Tuesday. He said that even after the IPO, the government will have a majority stake and will continue to control the management in view of the interests of the insured. Minister of State for Finance Anurag Thakur said in a written reply to a question in the Rajya Sabha that Reservation has been proposed in the Finance Bill 2021-22 on a competitive basis. For LIC life insurance holders, this issue will be up to 10 percent of the size.
In the budget speech 2021, Finance Minister Nirmala Sitharaman had said that LIC’s IPO will be launched in the financial year 2021-22 starting from April 1. The LIC Amendment Bill has been made part of the Finance Bill, so that the legislative amendment required for the IPO can be done. The government plans to reduce its 25 per cent stake in LIC.
LIC IPO may come after October
The initial public offering (IPO) of LIC may come after October this year. In a recent interview, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kant Pandey gave this indication. He had said that the sale of state-run airline AI and oil company BPCL will be completed by the first half of the current financial year i.e. September this year. LIC’s IPO was to come last year, but it was delayed due to some reasons. It is believed that the IPO of LIC has been delayed due to Coronavirus epidemic.
Let me tell you, before the IPO to assess the value of LIC, the department has selected select exurial firm Milliman Advisors. While Deloy and SBI Cap have been appointed as pre-IPO transaction advisors.
Target to raise 1.75 lakh crore from disinvestment
Finance Minister Nirmala Sitharaman has set a target of raising Rs 1.75 lakh crore from disinvestment in the financial year 2021-22. The government will raise this amount in the next financial year by selling its stake in 2 public sector banks and 1 insurance company. The Finance Minister said that the government will sell its stake in all PSUs except the 4 strategic sectors. The NITI Aayog has been asked to make a list of PSUs in which the government will sell its stake.
The government had targeted to raise Rs 2.10 lakh crore from the disinvestment of Central Public Sector Undertakings (CPSEs) in the current financial year. However, in view of the circumstances arising out of the COVID-19 epidemic, the government has drastically reduced the disinvestment target for the current financial year to Rs 32,000 crore. Out of the total disinvestment target of Rs 1.75 lakh crore in FY 2021-22, one lakh crore rupees will be raised from the sale of government stake in public sector banks and financial institutions. 75,000 crore rupees will come from CPSE disinvestment.