New Delhi (01.07.2021): The government has taken another decision to make LIC IPO ready by bringing into effect from June 30, all the 27 legislative changes made to the Life Insurance Corporation Act, 1956 through this year’s Finance Act. The legislative ecosystem to go ahead with the IPO with this move is now in place, which is expected to be the largest ever and could garner the exchequer of about Rs 1 lakh crore. The latest move of the Department of Financial Services to operationalize the 27 amendments in LIC Act comes on the heels of the government making changes in securities contracts Rules to relax minimum public offer norms to facilitate large issues such as that of LIC. The Centre has already started making presentations to international investors in roadshows to sound them out about the mega IPO that is in the works. It is, however, yet to issue the Request for Proposal for appointment of merchant bankers and book running lead managers. In the past few months, the government has been taking several key steps to make the insurance behemoth IPO ready including implementing the legislative changes to LIC Act, giving a nine-month tenure extension to incumbent LIC Chairman MM Kumar (whose term was to end on June 30) and offering a good wage hike to employees. Amendments to LIC Act include converting it from a corporation to a company, putting in place a board with independent directors in line with listing obligations, increasing the Authorised Capital to Rs 25,000 crore divided into 2,500 crore shares of Rs 10 each. Legislative changes have also been made for LIC to appoint an Audit Committee, appoint auditors, declare dividends and issue bonus shares. Amendments have also been done to ensure that the Centre will hold at least 75 per cent stake in LIC for the next five years after listing and at least 51 percent in the insurance behemoth after that period. Besides, amendments to ensure that policyholders are allocated a portion of the shares to be offered in the IPO has also been enacted and put into effect from June 30.
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LIC IPO may garner Rs 1 lakh crore to the exchequer
By IndianMandarins - 2021-07-01 11:36:00
New Delhi (01.07.2021): The government has taken another decision to make LIC IPO ready by bringing into effect from June 30, all the 27 legislative changes made to the Life Insurance Corporation Act, 1956 through this year’s Finance Act.
The legislative ecosystem to go ahead with the IPO with this move is now in place, which is expected to be the largest ever and could garner the exchequer of about Rs 1 lakh crore.
The latest move of the Department of Financial Services to operationalize the 27 amendments in LIC Act comes on the heels of the government making changes in securities contracts Rules to relax minimum public offer norms to facilitate large issues such as that of LIC.
The Centre has already started making presentations to international investors in roadshows to sound them out about the mega IPO that is in the works. It is, however, yet to issue the Request for Proposal for appointment of merchant bankers and book running lead managers.
In the past few months, the government has been taking several key steps to make the insurance behemoth IPO ready including implementing the legislative changes to LIC Act, giving a nine-month tenure extension to incumbent LIC Chairman MM Kumar (whose term was to end on June 30) and offering a good wage hike to employees.
Amendments to LIC Act include converting it from a corporation to a company, putting in place a board with independent directors in line with listing obligations, increasing the Authorised Capital to Rs 25,000 crore divided into 2,500 crore shares of Rs 10 each. Legislative changes have also been made for LIC to appoint an Audit Committee, appoint auditors, declare dividends and issue bonus shares.
Amendments have also been done to ensure that the Centre will hold at least 75 per cent stake in LIC for the next five years after listing and at least 51 percent in the insurance behemoth after that period. Besides, amendments to ensure that policyholders are allocated a portion of the shares to be offered in the IPO has also been enacted and put into effect from June 30.
