Cogencis, Sunday, Feb 2

By Tushar Chakrabarty and Sagar Sen

NEW DELHI - The government will aim to launch initial public offer of Life Insurance Corp of India in Oct-Mar of the next financial year starting April, Department of Financial Services Secretary Rajiv Kumar said today.

"It is provided for in the next year's disinvestment target. Timing, manner, quantum, will be worked out," Kumar said.

He said the Department of Investment and Public Asset Management is working out the modalities and due to the work involved, the IPO of LIC will be possible "only in second half and first half it will be difficult".

"Every year auditing takes place, they have statutory auditors...valuation we will decide. There is a math behind that but I cannot really talk about it because it is still in a very primitive stage," he said.

Kumar said as per Securities and Exchange Board of India's guidelines, minimum 10% stake in LIC needs to be sold by the government through IPO.

The government has set an ambitious disinvestment target of 2.10 trln rupees for 2020-21 (Apr-Mar), of which, 900 bln rupees are likely to be raised through disinvestment in public sector banks and financial institutions, according to the Union Budget presented on Saturday by Finance Minister Nirmala Sitharaman.

Kumar said the IPO will lead to greater transparency in the entire system of LIC. 

"...Public participation always brings more responsibility to payback and it is a good dividend paying place, so why not share the benefits to the customers those who have prescribed for this," Kumar said. 

"When you have those float in the equity market...it also deepens the equity market," he added.

India's largest life insurer, LIC is the biggest domestic financial institution in the country with total investment assets of 31 trln rupees as on Sep 30.

LIC's surplus for 2018-19 increased 9.9% to 532.14 bln rupees. This was the first time that LIC's surplus crossed the 500-bln-rupee mark. The company paid a dividend of 26.11 bln rupees to the government for 2018-19.  End

Edited by Ramya J.S. D'Rozario