Kerala Assembly Passes Unanimous Resolution Against LIC IPO, Here's Why
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Vanya GautamUpdated on Mar 17, 2022, 13:53 IST
Chief Minister Pinarayi Vijayan, who moved the resolution in the Assembly, opined that leaving the insurance giant LIC to the interests of private players would not be beneficial LIC's draft papers for IPO were filed with market regulator SEBI last month Pinarayi Vijayan said that such an institution is being privatised now without giving any opportunity for a detailed discussion
Amidst the much-awaited rollout of LIC IPO, the Kerala Legislative Assembly has passed a unanimous resolution against it.
The Assembly is voicing concern over the Centre's move to sell stakes in LIC and urging it to retain the institution, which played a key role in the development of the nation, as per PTI.
Kerala CM's Statement
Chief Minister Pinarayi Vijayan, who moved the resolution in the Assembly, opined that leaving the insurance giant LIC to the interests of private players would not be beneficial to the country and hence, the union government should revisit its decision of launching the LIC IPO.
Kerala CM said "The union government is trying to justify its act by propagating that only 5% stakes will be sold through an Initial Public Offering (IPO) and that is not privatisation. But it is clear that selling shares is the first step towards privatisation and that is the real objective of the government."
He also recalled that LIC was nationalised with an aim to protect stakeholders from the exploitation of private companies and to ensure that insurance coverage was extended to the weaker sections and backward areas of the country.
Further, Pinarayi Vijayan said that such an institution is being privatised now without giving any opportunity for a detailed discussion or examination in the Parliament. He criticised the Centre for amending the LIC Act by including it in the Finance Bill.
As per PTI, the Kerala CM quoted figures by saying that the public sector insurance giant has so far invested ₹36.76 lakh crore for the benefit of the society and this mammoth source of resource would be over with privatisation.
More Details About LIC IPO
For the uninitiated, LIC's draft papers for IPO were filed with market regulator SEBI last month, with the govt selling a 5% stake in the insurance giant through IPO, which is expected to be rolled out this month but might be delayed till May 2022. The IPO is key to the achievement of the government's disinvestment target for this financial year 2021-22. The IPO is a 100% offer for sale (OFS) by the Government of India and no fresh issue of shares by LIC.
Also Read: Jefferies India Says LIC IPO Can Disrupt Market Balance
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