New Delhi: Union Cabinet has cleared the largest insurance company in the country and the panel led by the Minister of Finance will now decide quantum dilution of interest, said a senior official on Monday.
The Department of Investment and Management of Public Assets (Depam) in January appointed Milliman Advisors LLP India’s Actuarial Company to assess the value of LIC embedded ahead of the IPO (initial public offering), which was mentioned as the largest public problem in India.
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The budget amendment for the LIC Law has been notified and the actuarial company is expected to complete the embedded value of life insurance companies.
Under the embedded value method, the insurance value of insurance companies from future profits is also included in the current valuable asset value.
“The Cabinet Committee for Economic Affairs last week cleared the Proposal of the initial public offering.
The alternative mechanism for disinvestment will now decide the quantum of interest will be divested by the government,” said the official.
The government hopes to exit with LIC IPO at the end of the current fiscal, the official adds.
Up to 10 percent of the size of the IPO LIC issue will be provided for policyholders.
The government has brought legislative amendments needed in LIC actions for the proposed IPO.
Deloitte and SBI caps have been appointed as the Pre-IPO transaction advisor.
LIC lists will be very important for the government to meet the consensible target.
The government aims to clean Rs 1.75 lakh crore in the current fiscal of minority stock sales and privatization.
From Crore Rs 1.75 Lakh, Rs 1 Lakh Crore is coming from selling government bets at public sector banks and financial institutions.
The rest of RS 75,000 Crore will come as a CPSE disinvestment receipt.
In his budget speech in February this year, Minister of Finance Nirmala Sitharaman said IPO LIC would float in 2021-22.