Budget 2021

Budget 2020 | LIC to go public, says Nirmala Sitharaman

In a major announcement during her Budget 2020 speech, Finance Minister Nirmala Sitharamam said State-owned Life Insurance Corporation of India (LIC) was set to go public. Ms. Sitharaman on Saturday said the Narendra Modi government plans to sell a part of its stake in the entity through an initial public offering (IPO) and raise funds.

Sitharaman, however, did not give details such as what percentage of holding would be sold or when it would take place. Listing of companies on stock exchanges “discipline a company and provides access to financial markets and unlocks its value. It also gives (an) opportunity for retail investors to participate in the wealth so created,” she said.

The government owns 100% stake in LIC, which was set up in 1956 and remains the country’s largest state-run insurer. LIC increased its share of the first-year premium income in the first nine months of this fiscal, rising to 70.52% from 66.24% recorded in 2018-19. According to Bloomberg estimates, its assets roughly equal $433 billion (over ₹30 lakh crore).

The Economic Survey 2020 has aggressively pitched for divestment in public sector undertakings (PSUs). The latest development comes close on the heels of the Union government’s announcement Monday to invite bids for 100% stake sale of national carrier Air India.

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Printable version | Jun 12, 2021 5:31:34 PM | https://www.thehindu.com/business/budget/budget-2020-lic-to-go-public-says-nirmala-sitharaman/article30711555.ece

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