03 Feb 2021: Government could reserve 10% of LIC IPO for policyholders
In her annual Budget speech, Finance Minister Nirmala Sitharaman said that the initial public offering (IPO) of Life Insurance Corporation of India (LIC) will be launched.
Now, after the mega announcement, a high-ranking official informed that the government could give policyholders a chance to become shareholders.
According to Dipam Secretary Tuhin Kanta Pandey, nearly 10% of the IPO could be reserved for policyholders.
Statement: 'Why should only government have LIC's shares?'
In an interview with TOI, Pandey dismissed the idea of only the government holding shares of LIC.
"For LIC IPO, we have put it in the Act that we will offer something to the policyholders. We are telling the policyholders to become shareholders. Up to 10% can be offered to policyholders. They are the same retail investors," he said.
Fact: LIC has a natural advantage, underlined Pandey
"The second point is LIC will also change. LIC also has to innovate because they have such a large market share. They have a natural advantage," he said.
Details: Pandey is confident that disinvestment revenue target will be achieved
Notably, the disinvestment revenue target for FY22 is Rs. 1.75 lakh crore, lesser than FY21's aim of Rs. 2.14 lakh crore.
When asked if it's achievable, Pandey replied in the affirmative, blaming the pandemic for last year's performance.
"Last year, COVID-19 set in when several of our transactions were just put out and we had to make a lot of extensions on request of the investors," he revealed.
Reaction: Biggest reform since 1991, a watershed moment: Pandey
Further, the official also dubbed the privatization policy a watershed moment, that has given a roadmap for four-five years.
"I think after the 1991 reforms, far as the public sector is concerned, this is the biggest reform. For the first time, we have said the entire non-strategic sector is available, which means you have a steel sector, it's completely available for privatization, (sic)" he said.
Details: He maintained that idle assets don't help the economy
In another interview with Moneycontrol, Pandey was asked if the government plans to move forward with assets' sales.
Arguing that idle assets don't serve the economy, he said, "If you have land for a certain strategic purpose keep it by all means. But if you have excess non-core asset or land, that needs to be monetized. Every department has to undergo this process."