LIC warns of labour unrest that could impact operations
Premium- LIC says it has not recognized any unions or other labour associations and does not enter into any wage settlement agreements
Life Insurance Corporation of India (LIC) has warned that industrial unrest, slowdowns, and increased wage costs could impact its business and operations.
“Certain of our employees are members of unions that our Corporation has not recognized, and we may be subject to industrial unrest, slowdowns and increased wage costs, which could adversely affect our business and results of operations," said the red herring prospectus (RHP) issued by LIC.
As of December 31, 2021, LIC had 105,207 full-time employees. The insurer says it has not recognized any unions or other labour associations and does not enter into any wage settlement agreements.
“Accordingly, it may be difficult for us to maintain flexible labour policies and we may face the threat of labour unrest, work stoppages and diversion of our management’s attention due to union intervention. Labour unrest or strikes associated with our business could also damage our reputation with our customers," RHP added.
LIC has been affected by strikes, work stoppages, or other labour disputes in the past.
For instance, on 8 January, 2019, 38,522, or 35.29%, of the insurance firm’s employees went on strike for two days, demanding a wage revision and certain options for pensions and recruitment.
The RHP had also noted the impact of attrition among its agents, and the challenges in finding and retaining enough agents to distribute its policies.
The LIC IPO has received ₹13,000 crore worth of investment commitments from anchor investors, more than twice the value of shares offered to such investors. Shares will be allotted to anchor investors on 2 May.
The government will sell 3.5% of LIC or 221.3 million shares. Of this, 22 million shares will be reserved for policyholders and 1.5 million for employees of the insurance behemoth.
The government expects to raise about ₹21,000 crore at the upper end of the price band in what would be India’s largest such sale.
The IPO values LIC at ₹6 trillion, almost near its embedded valuation and much lower than the ₹10 trillion to ₹15 trillion range that news reports said it would when the company filed its draft IPO papers in February.