India pushing to get LIC IPO done on time, says Finance Minister Nirmala Sitharaman
India pushing to get LIC IPO done on time, says Finance Minister Nirmala Sitharaman
The government encourages the initial public offering from life insurance that is supported by the state from India throughout the line in March and the delay will not be caused by a lack of political will, according to Minister of Finance Nirmala Sitharaman.
“We encourage it to solve it,” said Sitharaman in an interview with Bloomberg when asked whether it would succeed in completing in the current financial year. “The problem is not that we do not want it or we concentrate it now, this is more a question about doing legal processes.”
The internal assessment needed “almost every year” for LAC size companies, “has not been done,” said Sitharaman. Given that the 65-year-old insurance company has never been appreciated, the process will take time, he said.
“So the delay or time consumed is not because of the lack of political will to continue the policies stated,” he said.
Sitharaman announced plans to sell shares in insurance companies in February 2020, but pandemics slowed the process. The minister revived the offerings in February this year, but the assessment report – which is the key to investors and bankers – has not been resolved. The government has appointed bankers and legal counsel for sales and holds meetings with stakeholders.
Assessing a giant insurance company that holds more than $ 511 billion assets, equivalent to the industrial size of the Indian Mutual Fund, and controlling two thirds of the country market has been going on for months. The government strives to increase as many as 10 trillion rupees ($ 133 billion) by selling up to 10% of the shares. The sale of 5% of the shares will make it the biggest IPO in India, while 10% dilution will make it the second largest insurance company globally.
“I can’t go to the market without doing your own internal assessment,” Sitharaman said. “I have to go through the necessary path and maturity before I go to the market and say yes, I fulfill my commitment.”
The IPO is very important for the government because it will make the most of its plans to collect 1.75 trillion rupees through asset sales in the current fiscal year.
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