Jun 11, 2014, 01.21 PM | Source: CNBC-TV18

FM-bankers meet: Uday Kotak suggests listing of LIC

Uday Kotak, vice-chairman and managing director of Kotak Mahindra Bank says the government must list LIC, it can be a huge game changer for the Indian financial system. Not to forget that it will take care of the fiscal deficit.

After the pre-Budget meeting with finance minister Arun Jaitley concluded, Uday Kotak, vice-chairman and managing director of  Kotak Mahindra Bank said the new mantra now should be a move from ‘NREGA to Karega’.

He feels the government should list LIC, it can be a huge game changer for the Indian financial system. "Life Insurance Corporation of India (LIC) may be kept at minimum 51 percent government holding, but the government can consider listing LIC and the kind of money the government can raise by listing LIC is significant," Kotak adds. He believes it can fund all the needs of public sector banks as well as the fiscal deficit.

He adds this idea need not necessarily be in the July Budget, but over the next few years listing of LIC could be a major game changer for the Indian financial sector. 

He says the government should also reduce its stake in State Bank of India .

Calling for a need to make bold changes in equity savings schemes, Kotak says Indian savers need to be encouraged to get into equities. He says the Rajiv Gandhi Equity Scheme needs to be revamped completely. He believes Indian savers need to move from realty and gold to financial savings - to equities, insurance, mutual funds, etc.

Championing the cause of small and medium businesses, he says the entire scheme of entitlement should be linked to opportunity and work. He says time has come to push priority for venture capital. "As banks, we lend 40 percent to priority sector. We must give a big boost to venture capital and alternate asset funding because that is critical to small and medium businesses to get equity funding in India," he adds.

Kotak Mahindra stock price

On November 26, 2015, Kotak Mahindra Bank closed at Rs 684.35, up Rs 5.55, or 0.82 percent. The 52-week high of the share was Rs 744.45 and the 52-week low was Rs 423.58.

The company's trailing 12-month (TTM) EPS was at Rs 9.56 per share as per the quarter ended September 2015. The stock's price-to-earnings (P/E) ratio was 71.58. The latest book value of the company is Rs 77.62 per share. At current value, the price-to-book value of the company is 8.82.

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