Finance Minister Nirmala Sitharaman in her budget speech on Monday had mentioned that LIC IPO will be launch in the next financial year as the Centre aims to raise Rs 1.75 lakh crore through disinvestment in FY22.
LIC policyholders who have had a hand in creating this institution will get an opportunity to own a part of the PSU. Provisions have been added in the LIC Act to provide some reservation to policyholders as shareholders, said DIPAM secretary Tuhin Kanta Pandey. In an interview, Pandey said up to 10% of the issue size of LIC’s IPO will be reserved for policyholders.
“For LIC IPO, we have put it in the Act that we will offer something to the policyholders. We are telling the policyholders to become shareholders. Up to 10% can be offered to policyholders,” said Tuhin Kanta Pandey, Dipam secretary.
On the privatisation policy announced in Monday’s Budget, Mr Pandey said it is a landmark shift and watershed moment and it has given a road map for the next four to five years. “I think after the 1991 reforms, as far as the public sector is concerned, this is the biggest reform. We had a policy in 2004 but it was a case-by-case basis. For the first time, we have said that the entire non-strategic sector is available, which means you have a steel sector, it is completely available for privatisation.”
On the disinvestment target set for FY22, Mr Pandey said last year’s target was not achieved because of the COVID-19 pandemic. “That is now behind us and things are looking up and we hope to complete the sales. I am hopeful it is a realistic target,” he added.
The government on Monday announced that two public sector banks and one general insurance company will be privatised and LIC will be listed on the exchanges in the next financial year. This along with the disinvestment of BPCL and Air India will help the Centre achieve its disinvestment target for FY22, say experts.