New Delhi: The Centre is going to set up an IMG (inter-ministerial group) of Secretaries drawn from three ministries — Corporate Affairs, Law Ministry and the Finance Ministry — soon to start the process for the IPO (initial public offer) of LIC (Life Insurance Corporation), a source in DIPAM said.
The source said that Secretaries from DIPAM, Department of Economic Affairs and Finance Secretary Rajeev Kumar will be part of the IMG. The setting up of the IMG is the first step towards LIC IPO. The source said that the group will be responsible for clearing initial issues for LIC listing, like valuation and legislative changes required for the listing, etc.
The government is expected to take about 8-9 months to prepare accounts and do the required legal work before an IPO could be launched. The decision was announced by Union Finance Minister Nirmala Sitharaman earlier in February while presenting the Union Budget 2020.
The Centre currently holds 100 percent stake in LIC.
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LIC was identified as a candidate for a potential public listing by the Centre in July 2019. The move is part of the Centre's PSU disinvestment and asset monetisation plan.
LIC is India's largest financial institution and if LIC shares are listed on stock exchanges, it could easily be India's top listed company in terms of market valuation, overtaking current leaders Reliance Industries Ltd and Tata Consultancy Services.
In 2019, reports had said that the government was looking to sell a small tranche of its shareholding in LIC through an IPO. The IPO is likely to fetch a huge premium as LIC currently has a small equity base. The Centre had listed the shares of General Insurance Corporation and New India Assurance through IPOs three years ago.