News Coronavirus watch16 Sep 2020

India:COVID-19 causes delay in LIC valuation exercise

| 16 Sep 2020

The much-awaited initial public offering (IPO) of state owned Life Insurance Corporation of India (LIC), tipped to be the largest ever in the country, is unlikely to happen in the current fiscal year ending 31 March 2021 (FY21) because of a delay in its valuation process.

The delay is attributed to the COVID-19 pandemic that has made valuations unreliable in most sectors, according to a report by Business Standard.

A senior government official said, “The appointment of the asset valuer, which is perhaps the most crucial part of the pre-IPO process, is still pending. Even if one is appointed now, it may take six to eight months for the valuation to be done, given huge land assets of the state-owned insurer.”

Earlier, analysts had estimated LIC’s valuation in the range of INR9.9tn ($134.5bn) to INR11.5tn, reported .

During her Budget speech on 1 February, Finance Minister Nirmala Sitharaman had proposed to sell a part of the government's holdings in the state-run insurer via IPO.

Furthermore, officials have said that the stake sale is not possible without certain legislative changes, and there are “six proposed amendments to the LIC Act, including the Section which explains that LIC is a statutory body that needs to be redefined as a company under the provisions of the Companies Act”.

The government plans to table the amendments during the ongoing monsoon session of Parliament that started earlier this week.


 

| Print | Share

Note that your comment may be edited or removed in the future, and that your comment may appear alongside the original article on websites other than this one.

 

Recent Comments

There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.

Other News


Follow Asia Insurance Review