Before the LIC would announce its IPO, the Indian government extended a nine-month service of LIC chairman MR Kumar. The insurance proposed an initial public offer by the end of the current fiscal year.
In the Budget Speech 2021, Finance Minister Nirmala Sitharaman had said that the Initial Public Offer (IPO) of LIC would go on the floor in 2021-22 under the ambit of the ambitious ₹1.75 lakh crore disinvestment target.
The government accepted the proposal by the Department of Financial Services for extending the service term of Mr Kumar from June 30, 2021, to March 13, 2022, the date when he will complete his tenure of three years, sources said.
The sources also said that the rules under the Life Insurance Corporation Act, 1956, have undergone changes and now it approved the service extension period beyond the age of 60 years in view of the ongoing preparation for the IPO.
Mr Kumar was supposed to retire this month upon achieving 60-year of age.
The government is the sole stakeholder in LIC and it has 100% of control over decision making. Once listed, it may become the country’s biggest company in terms of market capitalization with an estimated valuation of ₹8-10 lakh crore.
Meanwhile, the government has increased the authorised capital of LIC to ₹25,000 crores from ₹100 crores to facilitate the public listing of the company.
The country’s largest insurance company has an asset base of ₹31,96,214.81 crore in its financial accounts.
As per the provisional data, LIC collected the all-time high of new business premium of ₹1.84 lakh crore in the financial year ended March 31, 2021.
In terms of the number of policy issues in FY 20-21, the market share of LIC of India stood at 81.04%. It has more than 29 crore policyholders that the company serves.