LIC stake sale to help govt meet divestment target
Tribune News Service
New Delhi, December 27
Though the government seems to have put off the privatisation of two public sector banks, its disinvestment target of Rs 175 lakh crore for the current fiscal appears to be on track.
The evaluation of Life Insurance Corporation is over and it is in a position to offload a fraction of its equity on the market, said sources. The government owns 100% stake in LIC and its embedded value (EV), the basis on which insurance companies are evaluated, is estimated at $150 billion.
The government also intends to sell stake in Nilachal Ispat, Pawan Hans, Bharat Earth Movers and Shipping Corporation within the current fiscal with sources indicating that the stage for financial evaluation of the offers will be reached soon.
That two public sector banks will not be privatised was clear after the government did not present a Bill to amend the requisite laws in the recently concluded winter session of Parliament. But the government has been forthright that a major chunk of the disinvestment collection will come from the LIC.
The government earlier gave an extension to LIC Chairman MR Kumar till March 2022 to ensure continuity in preparing the PSU behemoth for a stake sale. The government has also increased LIC’s authorised capital to Rs 25,000 crore from Rs 100 crore.
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