No privatization of LIC for now! Govt reassures in Lok Sabha's Question Hour
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New Delhi, Mar 16: The Central Government has informed the Lok Sabha on Mar 15, that the Life Insurance Corporation of India (LIC) is not being privatized. The information was provided by the government in a reply to a supplementary question during the Question Hour in Lok Sabha.
The Minister of State for Finance, Anurag Thakur, also stated that the govt will be bringing the Initial Public Offer (IPO) to bring in transparency and valuation. Thakur also replied that, the IPO will increase the investment in LIC. However, the decision regarding the percentage for shareholders will be taken later. The IPO is also known as the stock market launch.
The Minister reminded the opposition that the govt introduced a moratorium on loan repayments to banks when the pandemic hit the country. On similar lines, if there are problems faced by people in continuing payments of LIC premiums, the insurer may consider providing relief. As a response to questions raised about the disinvestment in LIC, MoS Anurag Thakur replied that “We are just bringing an IPO.” He also added and underlined the fact that no one is losing jobs in LIC because of the proposed IPO.
An IPO is a public offering where the shares of company are sold to the institutional investors. It can also be sold to the retail (individual) investors. The public offering is underwritten by one or more investment banks. These banks also arrange the shares which are listed on one or more stock exchanges. Through the process a privately held company is transformed into the public company. The mechanism can be used to raise new equity capital for the companies. It can also monetize the investments of the private shareholders like company founders or private equity investors.