When asked whether it would manage to complete it within the current fiscal, Sitharaman said in an interview with Bloomberg, “We are pushing for completion.” “The problem isn’t that we don’t want it or that we’re fully working on it now, it’s a question of having due process.”
Internal appraisals that require “approximately annual” for a company of LICThe size, “has not been done,” Sitharaman said. Given that the 65-year-old insurer has never been assessed, the process will take time, she said.
“So the delay or the time that is being spent is not because of lack of political will to go ahead with the announced policy,” she said.
Sitharaman announced plans to sell shares in the insurance company in February 2020, but the pandemic slowed down the process. The minister revived the offer in February this year, but the valuation report – which is important for investors and bankers – is yet to be finalised. The government has appointed bankers and legal advisors for the sale and held meetings with stakeholders.
The giant insurer, which has assets of over $511 billion, roughly the size of India’s mutual fund industry, and controls two-thirds of the country’s market, has been undervalued for months. The government is trying to raise up to 10 trillion rupees ($133 billion) by selling a 10% stake. 5% stake sale will make it India’s largest IPO, while a 10% dilution would make it the second largest insurer of the insurer globally.
Sitharaman said, ‘I cannot go to the market without doing my internal assessment. “I have to go through the necessary and proper path before going to the market and saying yes, I am fulfilling my commitment.”
The IPO is significant for the government as it will form the bulk of its plans to raise Rs 1.75 trillion through asset sales in the current fiscal.