Economic Affairs Secretary Tarun Bajaj
Economic Affairs Secretary Tarun Bajaj

The initial public offering of LIC may hit the market in the fourth quarter of next financial year, and the government has introduced amendments to the Life Insurance Corporation Act 1956 to facilitate this, Economic Affairs Secretary Tarun Bajaj said on Wednesday.

As many as 27 amendments have been pushed through the Finance Bill 2021 tabled by Finance Minister Nirmala Sitharaman on Monday along with the Union Budget 2021-22.

"Probably in the third or fourth quarter of next financial year, depending on how soon the valuation comes," he told PTI in an interview.

On Monday, the finance minister announced that the initial public offer (IPO) of Life Insurance Corporation (LIC) will take place in the next financial year.

Currently, the government owns a 100 per cent stake in LIC. Once listed, LIC is likely to become the country's biggest company by market capitalisation with an estimated valuation of Rs 8-10 lakh crore.

DIPAM, which manages government's equity in state-owned companies, has already selected actuarial firm Milliman Advisors for ascertaining the embedded value of LIC, ahead of the initial public offer. While Deloitte and SBI Caps have been appointed as pre-IPO transaction advisors.

The government on Monday budgeted Rs 1.75 lakh crore from stake sale in public sector companies and financial institutions, including 2 PSU banks and one insurance company, in the next fiscal year beginning April 1.

The amount is lower than the record budgeted Rs 2.10 lakh crore to be raised from CPSE disinvestment in the current fiscal.

However, COVID-19 pandemic impacted the government's CPSE stake sale programme, and the target has been lowered to Rs 32,000 crore in the Revised Estimates.

So far this fiscal, the government has mopped up Rs 19,499 crore from CPSE stake sale and share buyback.

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