Finance minister Nirmala Sitharaman announced in the Union Budget 2021 speech that the initial public offering (IPO) of Life Insurance Corporation of India (LIC) will be out in FY22.
She added that legislative amendments to this effect will be launched in the Parliament in the Budget session.
Moneycontrol had reported that LIC IPO that will be pushed to FY22 due to the Coronavirus-led delays.
Also Read: Why is LIC's IPO is the most-awaited listing in India?
The government plans to eventually offload 25 percent of its stake in LIC through multiple tranches.
Ahead of the IPO, if LIC is able to pare its stake in IDBI Bank, this would lead to unlocking of value and help increase the embedded value and consequently its valuation in the market.
The first step prior to the IPO is determining LIC’s embedded value, following which the insurer will have to bring down its stake in other listed companies to below 15 percent. The LIC Act will then be amended in Parliament. The government is yet to appoint an actuarial firm to determine LIC’s embedded value. The insurer had a balance sheet of Rs 32.8 lakh crore as of Q1FY21.
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