New Delhi. The country’s largest insurance company, Life Insurance Corporation of India (LIC), taking more time than expected in the valuation of its initial public offering (IPO) is unlikely to come in the current financial year 2021-22.
Valuation work not yet complete
A senior official of a merchant banker involved in the preparations for the IPO says that the work of valuation of this big company is not yet complete and it may take some more time. Even after the valuation work is completed, it will take time to complete many regulatory processes related to the issue.
The official said that prior approval of the market regulator Securities and Exchange Board of India (SEBI) will have to be taken before bringing the IPO. Apart from this, permission will also have to be taken from the Insurance Regulatory and Development Authority of India ie IRDAI. The post of IRDAI chief is lying vacant for almost 7 months. According to this official, in such a situation, the possibility of LIC’s IPO coming in the financial year 2021-22 is very less. Now only 3 months are left in this financial year.
Valuation of LIC is very complicated process
Valuation of LIC itself is a very complicated process. The reason for this is that the size of LIC is very large and its product mix is also mixed. It has real estate assets and several subsidiary units. Another official said that even the size of the share sale cannot be decided until the valuation work is completed.
Government has set a disinvestment target of Rs 1.75 lakh crore in FY22
The government is trying to bring LIC’s IPO in the current financial year itself. In fact, this IPO can play a very important role in achieving the disinvestment target of Rs 1.75 lakh crore this fiscal. Apart from this, the government also has high hopes from the Strategic Cell of BPCL. Recently, Finance Minister Nirmala Sitharaman had said that the government is moving well in the direction of disinvestment. He had said that it takes time to rectify the shortcomings of the bureaucracy and various departments, but the government is trying to speed it up.
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