LIC IPO may come in the second half of fiscal year 21, says the secretary of finance

NEW DELHI: List of insurance giant Life Insurance Corporation ( SCI ) can be done in the second half of next financial year, finance secretary Rajiv Kumar said Sunday.

Finance minister Nirmala Sitharaman while presenting the Budget 2020-21 on Saturday announced stake sale in SCI through an initial public offer in the next fiscal.

There are a number of processes which have to be followed for the listing and some legislative changes would also be required for the listing of SCI , Kumar said.

We will follow the existing procedure for the listing and for other things, including the legislative changes that it requires in consultation with the Ministry of Law and that process that we already started ... the listing in the second half of fiscal year 2011 seems logical, he said.

Live plus Listing of SCI will bring in greater transparency, public participation and also deepen the equity market, he told PTI in an interaction.

When asked about the dilution amount, Kumar said, it could be 10%, but so far no decision has been made.

The government aims to garner Rs 90,000 crore from the listing of SCI and stake dilution in IDBI Bank in the next fiscal out of total disinvestment target of Rs 2.10 lakh crore.

The government currently owns 100 per cent in SCI , while it holds around a 46.5 per cent stake in IDBI Bank.

"Listing of companies on stock exchanges discipline a company and provides access to financial markets and unlocks its value. It also gives opportunity for retail investors to participate in the wealth so created. The government now proposes to sell a part of its holding in SCI by way of Initial Public Offer (IPO)," the Finance Minister had said in her Budget speech.

Market participants are quite bullish about SCI and said it could be "IPO of the decade" akin to the Saudi Aramco listing.

The 60-year-old state-owned firm, SCI , is the country's largest insurer, controlling plus than 70 per cent of the market share. The insurer has a market share of 76.28 per cent in number of policies and 71 per cent in first-year premiums.

SCI has many subsidiaries including IDBI Bank. It acquired controlling stake in IDBI Bank last year.