The tenure of MR Kumar, the chairman of the IPO-bound Life Insurance Corporation (LIC) has been extended by one more year by the government. The extension is aimed at a smooth rollout of the public offer of the state-run insurance company.
This is the second time that Kumar’s tenure has been extended. His tenure was earlier extended for a period of 9 months till March 13, 2022, last year in June. Kumar is expected to continue as LIC chairman till March 2023, according to news agency PTI.
The government also extended the tenure of one of the managing directors, Raj Kumar, for one year.
The government expects to list LIC in the current financial year in line with the Budget announcement. FM Sitharaman in her budget speech last year said LIC IPO will be floated in 2021-22 as part of the government’s ambitious disinvestment target of Rs 1.75 lakh crore. The FM had said the IPO of LIC would be launched in the financial year beginning April 1.
However, earlier reports suggested that listing is unlikely to occur in the current fiscal as the valuation exercise of the state-owned behemoth was taking longer. Other than valuation, regulatory processes are expected longer as the IPO needs to be vetted by the Securities and Exchange Board of India (Sebi) and also the Insurance Regulatory and Development Authority of India (Irdai).
Earlier in January, Anurag Jain, secretary, department for the promotion of industry and internal trade (DPIIT) told reporters that the government is close to finalising the revised foreign direct investment (FDI) policy, which will facilitate LIC disinvestment.
“We are working on further simplification of the FDI policy. A very important point for further simplification is required urgently as we have to do the LIC disinvestment. So, we would be coming out with a revised FDI policy which will facilitate LIC disinvestment,” he had said.
The government owns a 100% stake in LIC, which is expected to fetch a market capitalisation of Rs 8-10 lakh crore making. Meanwhile, the government has significantly increased the authorised capital of LIC to Rs 25,000 crore from Rs 100 crore to facilitate the listing.
