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The Union government is planning the initial public offering (IPO) of Life Insurance Corp. of India (LIC) Ltd in the March quarter, a top government official said.

“We are working very hard for the LIC IPO," said Tuhin Kanta Pandey, secretary of the Department of Investment and Public Asset Management (DIPAM). “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 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 IPO of the country’s largest life insurer. Actuarial firm Milliman Advisors LLP India is already assessing the embedded value of LIC ahead of the IPO.

LIC’s listing will be key to the government achieving the disinvestment target of 1.75 trillion in FY22. So far, the government has garnered a meagre 9,330 crore through minority stake sales in public sector enterprises (PSEs).

While the PSE policy delineates the strategic and non-strategic sectors, it will take some time to implement, Pandey said. “We would require a lot of private sector participation to come forward for our invitation of bids," he added.

The DIPAM secretary said the government is trying to hand over Air India to the Tata group by December. “Our focus is how to hand over as quickly as possible," he added.

Pandey said that after a gap of 19 years, the government may be able to complete five to six cases of PSE privatization in FY22. “BPCL is in the due diligence stage. BEML and Shipping Corp. of India, Pawan Hans, Central Electronics Ltd, Neelachal Ispat 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, the market value 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 listings. Now, the listing is possible without profit. Fundamentally, those businesses must succeed. Newer businesses have to come into being because there are newer opportunities. It’s an exciting time for India. At 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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