LIC listing on stock market creates buzz
NEW DELHI: Among the big ideas of the day was the listing of insurance behemoth Life Insurance Corporation of India (LIC) and the stake sale in IDBI Bank to help attein the record Rs 2.1 lakh crore divestment target for next year. Finance Minister Nirmala Sitharaman expressed confidence in meeting the ambitious disinvestment target.
And Finance Secretary Rajiv Kumar agreed the disinvestment target is essentially going to come from listing of LIC and the dilution of government’s stake in IDBI Bank. The government currently owns 100 per cent in LIC, while it holds around 46.5 per cent stake in IDBI Bank. “The listing will decide the valuations (of LIC). We will work on this,” Kumar said, adding: “We will follow the extant procedure for listing and for other things, including the legislative changes it requires in consultation with the Ministry of Law and that process we already started.”
While Congress leader P Chidambaram refused to react on it, saying they will come back after a detailed meeting on it within the party, LIC’s employees union strongly opposed the plan.“LIC has always been the last resort for funding for other public sector entities. We strongly oppose the government’s proposal to sell a portion of its holding in LIC,” All-India Life Insurance Employees Federation General Secretary Rajesh Nimbalkar said.
Any dilution of the government’s stake in LIC would shake faith of the policyholders in the institution, he pointed out. Nimbalkar said though the government has not revealed the amount of stake it plan to sell, past experience suggests a majority stake would be sold, resulting into LIC losing its public sector status.