The central government is mulling to sell 25 per cent stake in Life Insurance Corporation of India in phases in a bid to bridge the budget gap and bolster finances that had taken a hit due to the COVID-19 pandemic, reported Mint on Tuesday (September 29).
Citing unnamed sources, the report said that the government is planning to seek Cabinet’s nod for the sale and to amend the act under which the LIC was set up. It said the timing of the initial public offering will be decided depending on market conditions.
The government had suffered an unprecedented stalling of growth due to the lockdown that now threatens the fiscal deficit target set for March 2021. The sale of 25 per cent stakes in LIC is expected to help the government rejuvenate its finances.
Deloitte Touche Tohmatsu India Ltd and SBI Capital Markets have reportedly been picked to help the LIC prepare for an initial share sale, it said citing a month-old report by Bloomberg News.
The Mint further reported that as part of the proposal, the Centre will seek an amendment for an authorised capital of ₹20,000 crore that will be divided into 20 billion shares. A panel of ministers formed for assets sale will decide the size of the public offering, it said.