InvestorQ : What is this Section 24 amendment ahead of LIC IPO and why is it so important?
Rashi Mehra made post

What is this Section 24 amendment ahead of LIC IPO and why is it so important?

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sarah Leo answered.
7 months ago


There was big hype over the proposed LIC IPO announced in Budget 2020. Before the LIC IPO becomes reality, there some key shifts that are essential and one such shift is amendment to Section 24 of the LIC Act. Section 24 of the LIC Act deals with how the corpus of LIC will be handled. It is well known that LIC has an investment portfolio that runs into $500 billion and is the largest institutional investor in India by a margin. Sec 24 stipulates that LIC shall have its own fund and all the receipts shall be credited into that fund and all payments shall also be made out of that fund only. With the government divesting 10% stake, it is not clear as to who will control this fund. This could become a major bone of contention as control over the corpus must be clarified in advance.


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Neelam Naik answered.
7 months ago


The LIC IPO will be opened after the amendments to Sections 24, 28 and 37 of the Act. where, Section 24 deals with the management of corpus by the corporation, Section 28 is all about dividend distribution and Section 37 will give government guarantee on all its policies. According to the industry expert, “New shareholder(s) might want a bigger pie of the corporation’s dividend,"