Life Insurance Corporation (LIC) is considering selling its stake in IDBI Bank before the IPO (Initial Public Offering). LIC bought a 51% stake in IDBI Bank in January last year. The Reserve Bank has given LIC 12 years to reduce its shareholding, but LIC can sell IDBI Bank shares before the IPO. LIC Chairman MR Kumar said this on Friday. He also said that the policyholders and employees of LIC will not be affected by the IPO. Around 1 lakh LIC employees protested against the IPO plan this week.
LIC’s enterprise value is Rs 36 lakh crore
On February 1, Finance Minister Nirmala Sitharaman announced in the budget that some stake of LIC would be sold through an IPO. The next day Finance Secretary Rajiv Kumar had said that LIC’s IPO could come in the second half of the next financial year (2020-21). The government can sell 10% of the shares through an IPO. The enterprise value of the company is Rs 36 lakh crore.
2.10 lakh crore disinvestment target of the government in the next financial year
The government plans to raise Rs 90,000 crore by selling some stake in LIC and the remaining shares of IDBI Bank. In the next financial year, the government has set a target of disinvestment of Rs 2.10 lakh crore. The government holds 100% of LIC and 47% of IDBI Bank.