Govt hopeful of selling minority stake in LIC in next fiscal, says DEA Secy

The government is hopeful of selling minority stake in Life Insurance Corporation (LIC) in the next fiscal, a senior official said on Wednesday.

Economic Affairs Secretary Atanu Chakraborty said it would take about 8-9 months to prepare accounts and do the required legal tweaking before an IPO of the insurance behemoth could be launched.

"I am certain that it will happen next year. It takes about 8-9 months for preparation of its accounts. What kind of legal tweaks that need to be made," he said at a CII event here.

Chakraborty said an initial public offering (IPO) of LIC would also help to discipline into the organisation and improve depth of the market.

"I am quite hopeful that we should be able to finish itbefore March 31, 2021. The money of course will come through, that's less of an issue. It will be a substantial chunk that not withstanding when you bring into public space such organisation," he added.

Finance Minister Nirmala Sitharaman in her 2020-21 Budget had said that LIC will be listed as part of the government disinvestment initiative.

Currently, the government owns 100 per cent stake in LIC.

The 60-year-old state-owned firm, LIC, is the country's largest insurer, controlling more than 70 per cent of the market share. The insurer has a market share of 76.28 per cent in number of policies and 71 per cent in first-year premiums.

LIC has many subsidiaries, including IDBI Bank. It acquired controlling stake in the bank last year.

The government aims to garner Rs 90,000 crore from the listing of LIC and stake dilution in IDBI Bank in the next fiscal out of total disinvestment target of Rs 2.10 trillion.

Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said the government is readying "big ticket disinvestment" for the next fiscal with approvals in place for BPCL, Air India, Shipping Corporation and Concor.

"Going forward, we have a challenging task and we are ready for it,... With someminority stake sale and big strategic disinvestment we hope to achieve this target," he said.

The government has revised downwards the budgeted disinvestment target of Rs 1.05 lakh in the current Fiscal to Rs 65,000 crore. So far, it has mopped up Rs 34,000 crore and hopes to garner the remaining amount by March 31, 2020.