Budget 2021: LIC's IPO to come in 2021-22, FM says
Touted to be one of the biggest IPOs in the history of India, the 10 percent stake sale of LIC had been planned for the second half of 2020, but was postponed due to the coronavirus pandemic.
Union Finance Minister Nirmala Sitharaman on Monday said the government will float shares for the initial public offering of India largest life insurance company LIC in 2021-2022, finally putting to rest months of speculation by investors around when the high profile listing would take place.
Touted to be one of the biggest IPOs in the history of India, the 10 percent stake sale of LIC was initially planned for the second half of 2020, but was postponed due to the coronavirus pandemic.
Sitharaman, in her Budget speech last year, had said that the government had planned to raise nearly Rs 1 lakh crore through the 10 percent shareholding sale. It is unclear if those estimates have changed.
LIC's IPO is part of the government's goal to disinvest in a number of State-held companies, including BPCL, Air India, Shipping Corporation of India, BEML, IDBI Bank, and Pawan Hans, among others. Sitharaman added that the government is looking to privatise two additional public sector banks, as well as one general insurance company this fiscal year.
"In spite of COVID-19, we have kept working towards strategic disinvestment. A number of transactions namely BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam Limited, among others would be completed in 2021-22," the Union Finance Minister said in her Budget speech.
"In 2021-22 we would also bring the IPO of LIC...," she added.
LIC counts over 12 lakh agents among its staff across 2,048 branches and 113 divisional offices. It also has a substantial presence in over 14 countries, including Bangladesh, Fiji, Kuwait, and Qatar.
"[The IPO and disinvestment in government-held companies] sounds fair enough, as the need of the hour is to raise as much funds as possible, to keep our creditworthiness and currency rate sacrosanct," said Siddharth Kothari, Chief Investment Strategist of family-run Om Kothari Group.
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Edited by Saheli Sen Gupta