The Appointments Committee of the Cabinet (ACC) has extended the term of Life Insurance Corporation (LIC) Chairman MR Kumar till March 13, 2022, the date he completes three years as Chairman of the insurance behemoth.
Currently, his notified term was to end on June 30 this year.
This extension was widely expected given that LIC is readying itself for a mega initial public offering (IPO) that is expected to help the government mop up close to ₹1-lakh crore in 2021-22.
It maybe recalled that Kumar was appointed as LIC Chairman on March 13, 2019. Kumar had joined LIC in 1983 as a direct recruit officer. In a career spanning nearly four decades, Kumar has headed three zones of LIC —Southern Zone, North Central Zone and Northern Zone.
The government had recently amended rules to specify that only Managing Directors of LIC will be eligible to appear for interviews of LIC Chairman.
Divestment proposal
Currently, the Centre owns 100 per cent of LIC. It is looking to divest up to 10 per cent stake in the proposed IPO. Once listed, LIC will become the country’s largest company by market capitalisation, say capital market observers.
Already the government has brought amendments to the LIC Act to make it IPO ready. Besides increasing the Authorised capital of LIC to ₹25,000 crore from ₹100 crore to facilitate listing, there has been changes in the law to reserve a portion of IPO to existing policyholders.
In the just-concluded financial year of 2020-21, LIC had recorded new business premium of ₹1.84-lakh crore, the highest ever in the history of this Corporation.