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Finance Minister Nirmala Sitharaman on Friday reviewed the progress made so far towards bringing the Initial Public Offer (IPO) of Life Insurance Corporation of India (LIC), the country's largest insurance company. The Finance Ministry said in a tweet on Friday, 7 January that Sitharaman reviewed the progress made so far regarding LIC's IPO.
The meeting was also attended by Tuhin Kant Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM) and several senior officials of the Finance Ministry. The government plans to bring the IPO of LIC by the end of this financial year i.e. March 2021. This could prove to be the biggest IPO in the country.
The government has set a target of raising Rs 1.75 lakh crore through disinvestment in the current financial year and LIC's IPO can play a very important role in meeting this target. Let us tell you that the government has been able to raise only Rs 9,330 crore by selling its stake in other public sector companies so far in this financial year.
For LIC's IPO, the government had appointed ten merchant bankers in September 2021, including Goldman Sachs, Citigroup and Nomura. On the other hand, Cyril Amarchand Mangaldas has been appointed as the legal advisor for the IPO.
The government is engaged in deciding the proportion of stake to be put up for sale in this IPO. Apart from this, it is also preparing for changes in the FDI policy to increase the stake to foreign investors in LIC.
According to SEBI rules, Foreign Portfolio Investors (FPIs) can buy shares in any IPO. Although LIC has been established by passing an Act in Parliament, in which there is no provision for foreign investment in LIC. In such a situation, the government is looking at making changes in the FDI policy along with the LIC Act.
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