LIC building at Janpath in New Delhi. (Priyanka Parashar/Mint via GettyImages) Given the massive size of state-owned insurer Life Insurance Corporation (LIC), the government is likely to pursue the proposed disinvestment of some of its shareholding in the company in two stages, reports Livemint.
The government may initially pursue an initial public offering (IPO) of LIC by selling a five-six per cent stake, following which it could sell more shares in a round of similar size. The overall size of the stake sale could be between Rs 1.2-1.5 lakh crore.
Also, even though the valuation of LIC is still to be concluded, the figure is likely to be between Rs 12-15 lakh crore.
The consideration of two-stage disinvestment via the stock markets comes as the government is said to be apprehensive that a sale of that size would crowd out private companies from the equity market, hampering economic growth.
Meanwhile, it should be noted that the Minister of State for Finance, Bhagwat Kishanrao Karad had said on 19 July in the Parliament that the proposed IPO is planned to be completed in the current fiscal itself.
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