InvestorQ : When is the proposed listing of LIC likely to go through and will LIC divest its stake in IDBI Bank before that?
Mitali Bhutta made post

When is the proposed listing of LIC likely to go through and will LIC divest its stake in IDBI Bank before that?

Answer
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Dawn Cherian answered.
4 months ago


Due to the COVID-19 pandemic, it looks like the listing of LIC and sale of government's stake in IDBI Bank may be delayed beyond March 2021. The government had plans to collect Rs.90,000 crore from the listing of LIC and stake dilution in IDBI Bank out of the total divestment target of Rs210,000 crore. However, experts feel that given the prevailing market situation, it may be difficult to do the LIC stake sale in the current fiscal as there is unlikely to be matching appetite for the mega LIC issue. The government currently owns 100% in LIC, while it holds 46.5% stake in IDBI Bank. The government may even be forced to cut down its expected realisation from stake dilution in LIC and IDBI Bank even if market conditions improve. Apart from valuation issues, the divestment of LIC also entails a plethora of regulatory clearances as well as an amendment to the LIC Act. All these may be tough to complete within this fiscal considering the COVID-19 conditions. LIC controls nearly 70% life insurance market and accounts for 76.28% of number of policies and 71% of first-year premiums. LIC currently holds 51% stake in IDBI Bank.