Budget Session 2022: Nirmala Sitharaman provides update on LIC IPO in speech

Finance Minister Nirmala Sitharaman has announced that the public issue of Life Insurance Corporation of India (LIC) is “expected shortly”. The announcement came during the Union Budget 2022 presentation today.

“Towards implementation of the new Public Sector Enterprise policy, the strategic transfer of ownership of Air India has been completed. The strategic partner for NINL (Neelachal Ispat Nigam Limited) has been selected. The public issue of the LIC is expected shortly. Others too are in the process for 2022-23,” said Sitharaman in her Budget speech.

According to reports, Sitharaman had recently reviewed the progress of the company’s mega initial public offering (IPO) in a meeting with top officials of the Finance Ministry. On January 30, it was announced that the tenure of the LIC Chairman MR Kumar has been extended till March 2023. The tenure of LIC’s Managing Director Raj Kumar has also been prolonged for a period of one year.

The public issue of LIC is of significant interest to the Centre, which owns a 100 per cent stake in the corporation. The upcoming IPO is expected to be the largest in the country in terms of market capitalisation, with an estimated valuation of around Rs 8-10 lakh crore.

The IPO of the insurance company is crucial for the government to meet its disinvestment target this fiscal, ending March 2022. The Union government has set an ambitious target to raise Rs 1.75 lakh crore, out of which Rs 75,000 crore is set to come from Central Public Sector Enterprises (CPSE) disinvestment receipts. The remaining Rs 1 lakh crore is set to be gained from selling government stake in public sector financial institutions and banks.

Till date, the government has garnered over Rs 9,330 crore through disinvestment in Public Sector Undertakings, as per reports.

According to a report by CNBCTV18, the government is looking to raise around Rs 1 lakh crore from the LIC IPO. Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey had told the news outlet, last month, that the government is planning to bring the public issue in early March 2022.

https://www.cnbctv18.com/business/companies/lic-ipo-targeting-early-march-dhrp-to-be-filed-soon-says-dipam-secretary-12268082.htm

In September 2021, the Centre had appointed 10 merchant bankers including SBI Capital Market Ltd, Axis Capital Ltd, JM Financial Ltd, Goldman Sachs (India) Securities Pvt Ltd, J.P. Morgan India Pvt Ltd and Nomura Financial Advisory and Securities (India) Pvt Ltd to manage the public issue of LIC.

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