Facing a financial challenge due to the Corona epidemic, the government plans to sell stakes in the Life Insurance Corporation of India (LIC) by 10-15 percent. According to the sources, its announcement may be made in the upcoming budget. The government may also announce a stake sale in IDBI Bank, Central Bank and Punjab & Sind Bank.
In the last budget, Finance Minister Nirmala Sitharaman had announced to sell some of the government’s stake by bringing an initial public offer (IPO) of LIC. But due to legal hurdles and adverse market conditions, no initiative could be taken in this direction for the entire financial year. It also could not be decided how much government would sell its stake in LIC. The process may start after April this year.
LIC is a wholly owned insurance company of the government. However, in March-April last year, there was talk of selling 10% stake of the government in LIC through IPO, which was estimated to get Rs 90,000 crore. According to sources, the government may have to seek Parliament’s approval to sell its stake in LIC. As on 31 March last year, LIC had assets of Rs 31,96,214 crore.
According to experts, in the current financial year the government could not complete the disinvestment process of a company like Air India and Bharat Petroleum. In such a situation, in view of the financial pressure, the government would like to bring IPO of LIC in the next financial year. In the current financial year, the government had targeted to raise Rs 2.1 lakh crore by selling its stake in public sector undertakings, but so far only seven percent of the target has been achieved. Finance Ministry officials have also said that the government will do any kind of disinvestment only if the market conditions are favorable.