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Ahead of LIC's initial public offering this financial year, the Life Insurance Corporation of India or will now have the post of Chief Executive Officer and Managing Director instead of the Chairman position, with the Centre making changes to relevant rules.

"Chief Executive and Managing Director means the Chief Executive Officer and Managing Director appointed by the Central Government under section 4 of the Act (LIC Act 1956)," as per a gazette notification issued on 7 July.

The changes have been made by the Department of Financial Services under the finance ministry by amending Life Insurance Corporation of India (Employees) Pension (Amendment) Rules. Besides, some other rules under LIC Act, 1956, have been amended.

To facilitate the listing of the insurance behemoth, the Central Government has already approved raising its authorised share capital to 25,000 crore.

Besides, the Department of Economic Affairs under the finance ministry recently amended the Securities Contracts (Regulation) Rules.

Firms that have a market capitalisation of more than 1 lakh crore at the time of listing can now sell just 5% of their shares, with the latest amendment in rules, a move that will be beneficial for the government during the LIC initial public offer.

Such entities will be required to increase its public shareholding to 10% in two years and raise the same to at least 25% within five years.

LIC IPO

The Centre is likely to invite bids from merchant bankers this month for managing LIC disinvestment as it moves ahead with plans to launch the IPO by January.

The Department of Investment and Public Asset Management (DIPAM) had in January appointed actuarial firm Milliman Advisors LLP India to assess the embedded value of LIC ahead of the IPO, which is touted to be the biggest public issue in Indian corporate history.

Up to 10% of the LIC IPO issue size would be reserved for policyholders.

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