On The Fence: Making Sense of LIC’s IPO

Hosted by Sourya Reddy
Edited by Manasi Nene

Ever since it was announced in the 2020-21 Budget Session, Life Insurance Corporation’s (LIC) IPO has been the talk of the town. As per recent reports, the Central Government is looking at a valuation of Rs. 15 trillion for the organisation, and is offering 5% of its shares to be traded on the stock market. This will bring in approximately Rs. 40,000-50,000 crores to the government, which it plans to use for national investment.

But there have been several questions about this move; will opening up LIC to private shareholders erode the public service ethos that the organisation was set up with? Does the government really need LIC to go for an IPO to realise its national investment goals? And will the IPO enable LIC to expand its reach and get more Indians insured?

In our latest edition of On The Fence, we spoke to Ashvin Parekh (Managing Partner, Ashvin Parekh Advisory Services) and P. Satish (President, South Central Zone Insurance Employees Federation) to understand this debate.

Manasi is a writer, filmmaker, and musician who is keen on exploring issues of education, technology and community mental health. She has also been active in the beatboxing and slam poetry communities of India. Off-the-clock, she can be found cycling, daydreaming, or daydreaming about cycling. Manasi works as The Bastion's Multimedia Associate.
Sourya is the Co-founder and CEO of The Bastion.

4 COMMENTS

  1. We must accept that there is always scope for improvement in any field for that matter, for the corporate sector also. It’s observed that with the shrewd planning and vision at the helm of affairs for time to time, Life Insurance Corporation of India is way ahead to practise the innovation leveraging the technology, manning the human resources by the structured training, clearly knowing” WHY” aspect of existence by suitable products and services to the policy holders, investing the funds wisely with caution of Corporate governance all these complying the regulations as a Corporate as well as wing of Government. The main point to be noted is LICI is for public convenience than the profit motive. The objection that LIC products are more as investment can be answered that average policy holder is for the growth of his/her capital and LIC is answering this adding risk cover. Is it true that present pvt.life insurers including SBI Life are selling only term insurance?
    LIC understood the needs and psyche of the people well. That’s LIC is household brand par excellence.
    It’s true that usefulness of anything is better understood before getting and after losing it by some. When Pvt players are in the industry; let players play their mettle. LICI proved it mettle and has been providing even in competition.
    Going for IPO is nothing but putting a square plug in the round hole as the goal of Government for funds is not the right reason for IPO of LIC as it’s an attempt to kill the hen laying golden eggs.

  2. LIC IPO is needless. LIC is not in need of money. Rather it provides huge amount of financial resources to the govt for its public welfare plans. Interest of retail investors is a bogus logic. LIC, at present, does utmost care to its smallest policyholders. IPO will ruin the economy in long run. LIC is a factory which makes money. Don’t tamper with its structure.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.