Government will retain management control in LIC after listing: Nirmala Sitharaman, Finance Minister

Finance Minister Nirmala Sitharaman today made it clear that the government will remain the majority shareholder in Life Insurance Corporation (LIC) even after listing of the insurance behemoth through the Initial Public Offering (IPO) on the stock exchanges. She said the government will continue to retain the management control safeguarding the interest of policyholders.

Giving this information in a written reply in the Rajya Sabha today, FM Sitharaman clarified that the Life Insurance Corporation is not losing its market share. She through her written reply said that listing of companies on stock exchanges disciplines a company and provides access to financial markets and unlocks its value.

The minister said it, LIC, had a market share of 74.71 per cent in several policies and 66.24 per cent in first-year premium income as on March 31, 2019. According to data published by the Life Insurance Council, the Corporation has a market share of 77.61 per cent in many policies and 70.02 per cent in first-year premium income.

Earlier the finance minister in her Budget speech 2020-21 on February 1, 2020, announced a proposal to sell a part of its holding in LIC through Initial Public Offer. Life Insurance Corporation of India (LIC) is a fully-owned government undertaking, at present.

The IPO would be brought out after the necessary legislative changes and regulatory approvals. It was announced that the listing of companies on stock exchanges disciplines a company and provides access to financial markets and unlocks its value. It also allows retail investors to participate in wealth so created.