Govt to retain management control in LIC
New Delhi: The government on Tuesday said it will continue to retain the management control of LIC and safeguard the interest of policyholders even after listing of the insurance behemoth through initial public offering (IPO) on stock exchanges.
In the Budget Speech 2020-21, Finance Minister Nirmala Sitharaman announced that Life Insurance Corporation of India (LIC), a fully-owned government undertaking, will be listed. In a written reply to a query in the Rajya Sabha, the minister said that listing of companies on stock exchanges disciplines a company and provides access to financial markets and unlocks its value.
"It also gives opportunity for retail investors to participate in the wealth so created," Sitharaman added. The IPO, she said, would be brought out after necessary legislative changes and regulatory approvals.
"The government will remain the majority shareholder and will continue to retain management control safeguarding the interest of policyholders," she said.
The finance minister further said LIC is not losing its market share. At the end of March 2019, LIC had a market share of 74.71 per cent in number of policies and 66.24 per cent in first year premium income. According to data published by the Life Insurance Council, LIC has a market share of 77.61 per cent in number of policies and 70.02 per cent in first year premium income as on January 31, 2020.
Meanwhile, Minister of State for Finance Anurag Thakur in another reply said the government has given in-principle approval for strategic disinvestment of 34 central public sector enterprises, including subsidiaries, units and joint ventures.
Strategic disinvestment implies sale of substantial portion of the government shareholding of a CPSE along with transfer of management control.