LIC IPO may not come this year, says report

NEW DELHI: The initial public offering (IPO) of LIC, which many claim is likely to be the largest ever, may not hit the primary market this year as the pre-IPO process has been delayed, a media report said.

Business Standard quoting a government official said the government is yet to appoint an asset valuer, which is perhaps the most crucial part of the pre-IPO process.

“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,” said the senior government official quoted by the news outlet.

The Department of Public Asset Management (DIPAM) had invited bids from consulting firms, investment bankers and financial institutions to advise the government on the preparatory processes of the proposed IPO back in June.

For the IPO, the government will engage two pre-IPO transaction advisors.

This comes at a time when the government’s plans to divest stake in Air India, BPCL and Concor have been put on the back burner due to the coronavirus pandemic. In fact, the bid invitation deadlines for Air India and BPCL have been pushed back twice this fiscal year.

Reports said the government is looking at listing LIC on domestic bourses in the January-March quarter of the current fiscal year. The IPO will contribute a significant chunk to the government's budgeted disinvestment target of Rs 2.10 lakh crore this fiscal year.

Finance minister Nirmala Sitharaman had announced in the 2020-21 Budget that the government would sell a part of its holding in LIC by way of public listing. LIC is fully owned by the government.