DIPAM Secretary Tuhin Kant Pandey has claimed that preparations are underway for LIC’s IPO and it will be launched in the last quarter.
LIC IPO: The IPO of the country’s largest insurance company Life Insurance Corporation (LIC) is less likely to come in the current financial year. This is because its valuation is taking longer than expected. A senior official of a merchant banker involved in the preparations for the IPO says that the work of valuation of this big company is not yet complete and it may take some more time. Even after the valuation work is completed, it will take time to complete many regulatory processes related to the IPO.
However, DIPAM Secretary Tuhin Kant Pandey has claimed in a tweet that preparations are underway for LIC’s IPO and it will be launched in January-March quarter 2021-22. Pandey says that preparations have been made to launch it in the last quarter of the current financial year.
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This could be the reason for delay in IPO
The senior official said that prior approval of the market regulator SEBI will have to be taken before launching the IPO. Apart from this, permission will also have to be taken from IRDAI, the regulatory body of the insurance sector. The post of IRDAI chief has been lying vacant for almost seven months. According to the official, in such a situation, the possibility of LIC’s IPO coming in the financial year 2021-22 is very less. Now only three months are left in this financial year.
Valuation of LIC itself is a very complicated process. The reason for this is that the size of LIC is very large and its product structure is also mixed. It has real estate assets. Another official said that even the size of the share sale cannot be decided until the valuation work is completed.
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This IPO important for disinvestment target
The government is trying to bring LIC’s IPO in the current financial year itself. In fact, this IPO can play a very important role in achieving the disinvestment target of Rs 1.75 lakh crore this fiscal. Apart from this, the government also has high hopes from the strategic sale of BPCL. Recently, Union Finance Minister Nirmala Sitharaman had said that the government is moving well in the direction of disinvestment. He had said that it takes time to rectify the shortcomings of the bureaucracy and different departments, but the government is trying to speed it up.
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