Recently, Central Government denied the claims around delay in IPO of Life Insurance Corporation of India. Media speculated that government will not be able to come up with IPO of LIC in current fiscal year. The current fiscal year will end in March, 2022.
Shri Tuhin Kanta Pandey, Secretary, DIPAM tweets a response after media reports on the delay. He stated, “Some media speculation doubting the feasibility of LIC IPO this fiscal year is not correct. It is reiterated that plan is on course for the IPO in the last quarter of this fiscal.”
The valuation of the state owned LIC is taking more than anticipated time. This might be one reason for delay of much awaited IPO.
Initial Public Offering (IPO) requires vetting by Securities and Exchange Board of India (SEBI) AND Insurance Regulatory and Development Authority of India (IRDAI). IRDAI has no head past seven months.
The number of regulatory procedures would require a lot of time to complete.
Cabinet Committee on Economic Affairs gave approval for the listing of LIC in July.
Government made 27 amendments to Life Insurance Corporation Act, 1956.
For first five years of the listing Central Government will hold at least 75%. After five years it will drop the ownership to 51% or more.
