Disinvestment of India's largest insurer LIC cleared

Cabinet clears LIC stake sale, bids for merchant bankers soon

The government has said it will retain a majority stake and management control

The stake sale is likely to take place in between October this year and March 2022 depending on market conditions. Credit: DH File Photo

The government is likely to invite bids for merchant bankers within a fortnight to manage Life Insurance Corporation of India’s disinvestment after the Union Cabinet cleared part of the Centre’s stake in the insurance behemoth.

The Cabinet Committee for Economic Affairs (CCEA) cleared the disinvestment of LIC through an initial public offering (IPO) last week, according to government officials.

The size of IPO and the extent of the government’s stake dilution will now be decided by an alternative mechanism. The government has said it will retain a majority stake and management control to protect the interest of policy holders.

Up to 10% of LIC IPO would be reserved for policyholders, sources told DH.

The stake sale is likely to take place in between October this year and March 2022 depending on market conditions.

Also Read | LIC looking to bid in Zomato IPO: Report

Touted as the biggest of all IPOs, the LIC stake sale may fetch the government more than Rs 1 lakh crore, according to experts.

The share sale in LIC has now become crucial for the government to meet a hefty disinvestment target of Rs 1.75 lakh crore in the current fiscal ending March 2022.

Of the Rs 1.75 lakh crore, Rs 1 lakh crore will come from selling government stake in public sector banks and financial institutions and Rs 75,000 crore would come as CPSE disinvestment receipts.

Deloitte and SBI Caps have been appointed as pre-IPO transaction advisors.
 

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