The government will list LIC in the second half of the next fiscal on the exchange with minimum 10% equity dilution which is the extract norm, a senior government official said.
“The listing of LIC will be taking place in the second half of the next fiscal and the quantum will be as per extract norm which is minimum 10%,” Rajeev Kumar, Finance Secretary said.
He said the exact timing, manner and the quantum is to be decided. He however said the dilution could also include private equity players, with follow-on public offers as well. But as per norms, it cannot be less than 10%.
As per market regulator SEBI’s norms all companies with a post-issue capital above Rs 4,000 crore are compulsorily required to offer at least 10% stake in the IPO. Further, companies that dilute less than 25% in an IPO will be given three years to comply with the minimum public shareholding norms.
Kumar said without divulging the details on LIC listing that there will be a change in the Act to enable LIC be listed on the market which will happen in due course and the law ministry is kept in the loop for the necessary legal changes.
On the IDBI Bank which LIC owns now with 51% and government with 46% stake, the Budget had announced that government will fully exit IDBI Bank and it will be a private bank. The government exiting IDBI Bank may happen earlier than LIC listing, Kumar hinted.
In the Budget 2020, the government announced its decision to list LIC in the exchanges and together with government stake sales in financial institutions (banks), it is targeting to get Rs 90,000 crore as part of the huge disinvestment limit of Rs 2.10 lakh crore.
He did not give a break-up of LIC equity dilution portion from the Rs 90,000 crore target.
LIC is the largest domestic financial institution in India with total investment assets of Rs 32 trillion as on September 30.