The Government of India has approved the IPO of state-run Life Insurance Corporation of India (LIC) and also extended its chairman M R Kumar’s term by nine months.
Decisions on issues related to the IPO such as the issue size of the offering will be made by a group of ministers, Disinvestment Secretary Tuhin Kanta Pandey said.
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The government aims to list the insurer by the fourth quarter of the financial year 2022.
“We are looking at the fourth quarter and work on several fronts is progressing for the IPO,” Pandey was quoted by Times of India as saying.
The mega IPO is expected to raise approximately $13.42bn. Up to 10% of the IPO issue size would be reserved for policyholders.
The move is said to follow the government’s efforts to bridge the widening budget gap, which has been suffering due to the nationwide lockdown instigated by the Covid-19 pandemic.
Required changes to the LIC Act of 1956 for the IPO have already been made by the government.
The insurer will have a CEO and a managing director appointed by the Central Government under section 4 of the Act (LIC Act 1956).
Last month, media reports emerged that the Indian government is planning to bring in a group of anchor investors to invest up to $3.41bn (INR250bn) in the LIC before its IPO.
The IPO was first announced by Finance Minister Nirmala Sitharaman during the 2020-21 budget.
