As per Recent announcement in Budget 2020, Government of India has decided to bring IPO of LIC (Life Insurance Corporation of India) and sell a part of their stake in insurance giant.
The process is expected to start in later this year and the IPO is likely to be launched in second half of FY’21. Before the IPO of LIC there is need of some legislative changes to be done.
As per FM interview to a news channel she said “We have only said an IPO. We have not given complete ownership to somebody”
The government aims to gather Rs. 90,000 Cr. 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 Cr, in LIC Government owns 100% stake while in IDBI it holds around 46.5% stake.
“Listing of companies on stock exchanges disciplines a company and provides access to financial markets and unlocks its value. It also gives opportunity for retail investors to participate in the wealth so created. The government now proposes to sell a part of its holding in LIC by way of Initial Public Offer (IPO),” the Finance Minister Nirmala Sitharaman had said in her Budget speech.
LIC IPO could become IPO of the Decade like to UAE’s oil giant Saudi Aramco which is biggest IPO so far and it Market Cap it may leave many fold behind the current giant Reliance.
As per Sources the dilution in stake could be around 10% but same is yet to be decided.
LIC has many subsidiaries including IDBI Bank. It acquired controlling stake in IDBI Bank in 2019.