Premium| Listen to this article |
A day after the government announced that the FDI policy will be amended to facilitate the much-awaited initial public offering of (IPO) of state-owned Life Insurance Corporation of India (LIC), Finance Minister Nirmala Sitharaman on Friday reviewed the progress in terms of the public offering.
Secretary of the Department of Investment and Public Asset Management (DIPAM) Tuhin Kanta Pandey was also present in the virtual meeting along with other officials.
"Union Finance Minister @nsitharaman reviewed progress of the LIC IPO in New Delhi today in presence of @SecyDIPAM Secretary @DFS_India and Senior Officials @LICIndiaForever and @FinMinIndia via VC," said a tweet by the Ministry of Finance.
The government expects the public offer to hit the markets in the ongoing quarter (January-March), although concerns have been raised of late of a delay in the offer as the valuation of the insurance behemoth is yet to complete. Recently, the DIPAM secretary tried to allay the concerns and said that the IPO would come in the fourth quarter of FY 2021-22.
On Friday, Anurag Jain, Secretary of the Department for Promotion of Industry and Internal Trade (DPIIT) said the current policy related to the sector will not facilitate the disinvestment process of LIC, the government would make the required amendments to facilitate the process.
The merchant banker 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.
Valuation of LIC is a complex process because of its size, product mix, real estate assets, subsidiaries and profitability sharing structure, and the size of share sale depends on the valuation, another official said.
The LIC IPO gains significance as it would form a major component of the government's disinvestment target of ₹1.75 lakh crore for FY22.
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.
Earlier in the day, the Finance minister also reviewed the preparedness of public sector banks (PSBs) to tackle any potential impact of the fresh wave of covid-19 that has led several states to reimpose curbs on public gatherings and operations of businesses and offices.
Never miss a story! Stay connected and informed with Mint. Download our App Now!!