The Narendra Modi led Bhartiya Janta Party (BJP) government is formulating over the public listing of India’s largest financial institution Life Insurance Corporation of India. LIC which currently holds two-thirds share of India’s life insurance market
The process is in the early stage and has been discussed within the government, sources were quoted as saying in media reports.
Soon, investing in LIC will become more beneficial, this plan being made by Narendra Modi government.
If the Life Insurance Corporation shares are listed on Indian stock exchanges like NSE and BSE, the report said, it could easily evolve as the country’s top listed company in terms of market valuation. LIC could surpass current market heavyweights like Reliance Industries Ltd and Tata Consultancy Services.
Modi government is preparing to bring the country’s largest life insurance company, Life Insurance Corporation of India (LIC) to the stock market. The government is making such preparations to accelerate its disinvestment program and raise huge amount in this financial year. Finance Minister Nirmala Sitharaman put the target of disinvestment in the fiscal year 2019 to Rs 1.05 lakh crore, whereas in the previous fiscal, the target of disinvestment was 90,000 crore rupees.
Preparation to launch LIC in the stock market
According to the report of the Indian Express, this process is in the initial phase and it has been discussed in the high officials of the government. Proposal is that a part of the government’s controlled this institution’s first IPO will be sold and later the government’s share will be sold.
L.I.C. posted net Profit of Rs 23,621 crore in 2018-19.
In the year 2018-19, LIC has received profits of Rs 23,621 crore in the stock market, as against Rs 25,646 crore in the previous year. The company had invested Rs 68,621 crore in the stock market during this period. LIC has invested Rs 4,34,959 crore in debentures and bonds and Rs 3,76,097 crore in many infrastructure projects.
Act will have to change
LIC currently comes under the Regulation of Insurance Regulatory and Development Authority (IRDAI), although its operations are under the LIC Act of 1956. The government will have to make changes in this act before its listing in the stock market.