The government is preparing the listing of exchanges on the exchanges that is the largest life insurance company of India, 'LIC'. The government is making such preparations to accelerate its disinvestment program and raise huge amount in this financial year. If LIC was listed on the stock exchanges then it could easily become the country's number one listed company according to the market value and will leave the current giant Reliance Industries behind.
In fact, the capital base of LIC is only Rs 5 crore, but in the financial year 2017-18, profit or valuation surplus was Rs 48,436 crores and assets under management was Rs 31.11 lakh crores. Because of this LIC's IPO will be listed on a lot of premiums. The Indian Express has informed sources that this process is in the very beginning and it has been discussed in the high officials of the government. The proposal is that a part of the government's controlled this institution's first IPO will be sold and later the government's share will be sold.
Significantly, the government has announced in the budget that public holding in listed companies will be at least 35 percent. Earlier, the government has listed the issue of General Insurance Corporation and New India Assurance IPO two years ago in the stock market. When a company is listed for the first time in the stock market, an initial public offer ie IPO is issued for it. To bring the LIC into the stock market, the first thing is to change the LIC Act.
It is noteworthy that LIC has been hesitant because of the government withdrawing the stock market so far as it has played an important role in the recovery of government companies in the stock market so far. In fact, when shares of a government company are falling due to the sale of the shares, or the buyers remain less then it is often seen that LIC buys these companies, which gives them support. LIC has cash of millions of crores of which it invests in many means. LIC has invested Rs 4,34,959 crore in debentures and bonds and Rs 3,76,097 crore in many infrastructure projects. In the year 2018-19, LIC has received a net profit of Rs 23,621 crore in the stock market. The company had invested Rs 68,621 crore in the stock market during this period.
LIC currently comes under the Regulation of Insurance Regulatory and Development Authority (IRDAI), although its operations are under the LIC Act of 1956. Before listing the stock market, the government will have to make changes in this act.
