Govt expects LIC IPO to set the stage for wider reforms

The initial public offering (IPO) of Life Insurance Corporation of India (LIC) should not be seen merely as an exercise to meet the government's divestment target, but also as a precursor to wider reforms, a top official said.

This would also align with the government's larger policy of moving out of non-strategic sectors completely, while having minimal presence in the identified strategic sectors of atomic energy, space and defence, transport and telecommunication, power, petroleum, coal and other minerals, and banking, insurance and financial services.

Getting the LIC IPO into motion sends a strong signal to the market that the government means business, economists said.

The IPO of the country's largest insurer is expected in the first week of May.

The board of LIC has agreed to dilute a 3.5% stake with an upper limit of 5%, amid headwinds from volatile stock markets and investor interest, Mint reported on Saturday.

The government aims to garner ₹21,000-30,000 crore from the sale, at a valuation of ₹6 trillion.

The reservations, discounts and issue price will be ascertained by Wednesday morning.