LIC IPO Expected to Hit Market in Q4; Speculations on 'Delay' Incorrect: Govt

LIC IPO: The central government has recently refuted claims around the initial public offering (IPO) of the Life Insurance Corporation of India. The Centre, a day back, dismissed media speculations claiming that the government is unlikely to come up with the IPO of Life Insurance Corporation (LIC) in the current financial year ending March 2022. The Secretary of Department of Investment and Public Asset Management in a tweet said that the plan is on course, refuting these media claims, and said that the reports were not correct. The government’s reaction comes a day after such a report was published in the media.

“Some media speculation doubting the feasibility of LIC IPO this fiscal year is not correct. It is reiterated that plan is on course for the IPO in the last quarter of this fiscal,” Secretary of Department of Investment and Public Asset Management (DIPAM) said in a tweet on Sunday.

On December 19, a media report suggested that it was unlikely for the government to come up with the LIC IPO by the end of the current fiscal. The valuation of the state-owned behemoth is taking more than anticipated time, and preparatory work is still far from complete, the report suggested.

“There are still some issues that need to be addressed with regard to the valuation of LIC,” the report, quoting one of the senior officials of a merchant bankers, said on Saturday.

The official added that the initial public offering (IPO) requires vetting not only by the Securities and Exchange Board of India (Sebi) but also the Insurance Regulatory and Development Authority of India (Irdai) that has been headless for almost seven months, according to the report.

Given the number of regulatory procedures to be fulfilled, the official said it would be difficult to meet the deadline of the fourth quarter of the current fiscal by any stretch of imagination, added the media report.

However, the government has claimed that the course of work is on and the speculation about the feasibility of the LIC IPO is incorrect.

The Cabinet Committee on Economic Affairs (CCEA) had in July given its in-principle approval for the listing of LIC. The government has already appointed 10 merchant bankers for the transaction.

To facilitate the listing of LIC, the government earlier this year made about 27 amendments to the Life Insurance Corporation Act, 1956.

As per the amendment, the central government will hold at least 75 per cent in LIC for the first five years post the IPO, and subsequently hold at least 51 per cent at all times after five years of the listing.

(With PTI inputs)

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