LIC IPO: Centre unlikely to reduce its stake in LIC for at least 2 years

6 Apr 2022 , 06:49 PM

According to the media reports, the government is unlikely to reduce its shareholding in Life Insurance Corporation of India (LIC) for at least 2 years following the insurer’s listing because such a move could affect returns for investors participating in the mega initial public offering (IPO).

The government’s stance was communicated to prospective investors during roadshows after many sought clarity on the Centre’s plan to lower its shareholding in the insurer to meet the minimum public shareholding norms.

To clarify, the Centre maintained that it would not look at any equity dilution in the insurer for at least two years to avoid any downward pressure on LIC’s shares, the media reports added.

Further, investors were informed that the insurer had sufficient capital for the next two years.

The government was expecting to garner over Rs60,000 crore by selling about 31.6 crore or 5 per cent stake in the life insurance firm to meet the curtailed disinvestment target of Rs78,000 crore in 2021-22.

The Centre is unlikely to reduce its shareholding in Life Insurance Corporation of India (LIC) for at least 2 years following the insurer’s listing because such a move could affect returns for investors participating in the mega initial public offering (IPO), the reports added.