Government is aiming for a March quarter listing of the Life Insurance Corporation of India (LIC) Ltd which will be a big event for the equity market, Department of Investment and Public Asset Management (DIPAM) secretary Tuhin Kanta Pandey said on Wednesday.
“We are working very hard for the LIC IPO. This is one large financial institution which had remained so far away from the market. In terms of the capital market, it will be a very big event in the last quarter of FY22. That’s what we are working for,” Pandey said while speaking at the CII Global Economic Policy Summit.
DIPAM has appointed 10 merchant bankers including Goldman Sachs (India) Securities, Citigroup Global Markets India and Nomura Financial Advisory and Securities India to manage the mega IPO of the country’s largest life insurer. Actuarial firm Milliman Advisors LLP India has already been appointed to assess the embedded value of LIC ahead of the IPO. LIC listing will be key to government achieving the disinvestment target of ₹1.75 trillion in FY22. So far, government has garnered ₹9330 crore through minority stake sales in public sector enterprises (PSE).
Pandey said while the PSE policy is in place now clearly delineating the strategic and non-strategic sectors, it will take some time to implement. “We would require a lot of private sector participation to come forward for our invitation of bids,” he added.
DIPAM secretary said government is trying to hand over Air India to the Tatas by December after the privatization process is completed. “Our focus is how to hand over as quickly as possible,” he added.
Pandey said government may be able to complete five to six privatizations of PSEs in FY22 after a gap of 19 years. “BPCL is in due diligence stage. BEML and Shipping Corporation of India, Pawan Hans, Central Electronics Limited, Nilachal Ishpat Nigam Ltd–these are the transactions which we think that financial bidding can take place in December-January and we can close the transactions this year itself. Over a period of time, gaining experience from Air India privatization, going forward actually we can try and accomplish these strategic disinvestments faster.” he added.
In October this year, market cap of the Indian equity market exceeded $3.5 trillion surpassing France to become the sixth most valuable market in the world, Pandey said, adding that he is enthused by the equity market listing of startups. “We have different kinds of listing. Now listing is possible without profit. Fundamentally, those businesses must succeed. Newer businesses have to come in to being because there are newer opportunities. It is exciting times for India. In the beginning of this decade and right in the pandemic, we could actually attract such investments. Unless and until startups are able to raise money from the market, they can’t grow and become established. I would say this is a good sign,” he added.
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