India’s biggest financial institution could emerge as India’s most appreciated listed company if the government moves forward with the suggested initial public offering scheme as reported today by The Indian Express. The company commands, in particular, a net profit of a whopping Rs 48,436 crore and a complete asset under Rs 31.10 lakh crore leadership.
As a monolith, the Life Insurance Corporation was established. If you (LIC) were the stock exchange-listed company, you might be the most appreciated firm, “said Arun Jaitley, former finance minister in 2016.
The current position of Reliance, TCS:
NBB reported last month that IT giant TCS is currently the most valued Indian company with Rs 7.91 lakh crore market capitalization.
Reliance Industries commands a total M Cap of Rs 7.70 lakh crore, making the Mukesh Ambani-led firm the second most valued Indian company in India.
The LIC listing proposition is in the early stages and has been discussed in the government. Initially, the proposal is to sell a small tranche of the government-controlled institution through an IPO and then dilute the holdings of the government, sources reported.
In the latest budget, the government has already announced a proposition to create a minimum 35 percent public holding for listed companies. More than two-thirds of the fresh company premium is represented by LIC. Nearly all of its cash comes from the premium paid by policyholders who have to be provided with competitive yields.
This proposed listing of LIC comes even as the Narendra Modi-led government has announced mega disinvestment plans for the current financial year.
Government’s Disinvestment Proceeds in the Budget:
In her recent budget, finance minister Nirmala Sitharaman has estimated that the government’s disinvestment proceeds to be Rs 1.05 lakh crore, an increase of 31% over last year’s figure. In the revised estimate for Financial Year 2018-19, the Union government has pegged its disinvestment proceeds at Rs 80,000, the same as in the budget estimate. In case the government manages to move ahead with the listing of LIC, it should add further to the government’s coffers.
At the time when even Air India stake sale continues to elude the government, the center plans to list 10 more central PSUs and go ahead with the strategic sale in a bid to achieve the ambitious disinvestment target of Rs 1.05 lakh crore in the current fiscal, DIPAM Secretary Atanu Chakraborty said last week.
As announced in the recent budget, the Union government is hoping to garner more than Rs 1 lakh crore in this financial year from the sale of its shares in PSUs.