LIC Valuation not decided yet for an IPO: Chairman
To begin with, Mr. MR Kumar, chairman of LIC conveyed in a meeting on Friday that the LIC valuation for an IPO stood undecided at the moment. Besides, he added the divestment of the Life Insurance Corporation by the government would not create any problems for the employees. However, the staff would react, but the company would talk to them on the matter, he said. Also, he assured that the proposed stake sale might not lead to its privatization of the insurer.
Besides, in the Union Budget for 2020-2021, the government had proposed to divest a part of its stake in LIC. As a result, this could partially list the largest insurance company in the country. However, this move also led to protests by staff saying it stands against the national interest.
Despite this, LIC chairman voiced after the trade union All India LIC Employees Federation staged an hour-long walkout strike. So then, this strike expressed a protest against the move taken by the government to sell its stake in the state-run insurer.
At present, the government owns a 100% stake in LIC which came up in 1956. Also, it consists of a majority share in the life insurance market in the country.
Hence, cutting down its stake would help the government meet its divestment target. So, the target has now increased to Rs 2.1 lakh crores in FY21.
Although, the government did not give a roadmap for listing LIC, yet it said that Rs 90,000 crores would come from the stake sales in state-owned banks and financial institutions.