Prior to LIC’s initial public offering this fiscal year, the Life Insurance Corporation of India will now assume the role of CEO and Managing Director instead of the President, with the Center making changes to the relevant rules.
“The director general and director general designates the director general and the director general appointed by the central government by virtue of article 4 of the law (Law LIC 1956)”, according to a notification published in the gazette on July 7.
The changes were made by the Financial Services Department of the Ministry of Finance by changing the pension rules (amendment) of the Indian Life Insurance Company (Employees). In addition, certain other rules of the LIC Act of 1956 have been amended.
To facilitate the registration of the insurance giant, the central government has already approved the increase in its authorized share capital to ₹25,000 crores.
In addition, the Department of Economic Affairs of the Ministry of Finance recently changed the rules on securities contracts (regulation).
Companies with a market capitalization greater than ₹1 lakh crore at the time of listing can now only sell 5% of its shares, with the latest rule change, a move that will benefit the government during LIC’s initial public offering.
These entities will have to increase their public participation to 10% in two years and increase it to at least 25% in five years.
The Center is likely to invite offers from investment bankers this month to handle the divestment from PFRs as it moves forward with its plan to launch the IPO by January.
The Department of Investment and Public Asset Management (DIPAM) appointed actuary firm Milliman Advisors LLP India in January to assess the intrinsic value of LIC ahead of the IPO, which is touted as the largest public problem of Indian business history.
Up to 10% of the issue size of the IPO of LIC would be reserved for policyholders.
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