LIC will continue as a govt entity, assures Chairman | Interview

Life Insurance Corp set to launch $8 billion IPO on March 11
Life Insurance Corporation of India (LIC) logo is seen at a metro station in Mumbai, India, January 31, 2022. Reuters/Francis Mascarenhas

New Delhi: The Life Insurance Corporation (LIC) is entering its third phase, or LIC 3.0, according to state-owned insurance and investment firm's chairman M R Kumar.

He termed it LIC 3.0, referring to the insurance behemoth's decision to go public next month. The corporation is planning to float a Rs 2,000 crore issue, one of the highest for any stock at listing.

Explaining the growth of LIC, Kumar, hailing from Kalpathy in Palakkad, termed the corporation expanding its footprint all over the country the phase one, or LIC 1.0.

It was followed by LIC 2.0 when it consolidated its market position and held out against competition from several private players that entered the market after India opened up its economy as part of the country's liberalisation policy.

LIC 3.0 is going public by issuing Initial Public Offering (IPO).

In conversation with Manorama, Kumar opined that there is no point in waiting indefinitely despite unpredictable market conditions.

Excerpts from the conversation:

LIC's IPO is targeting a significant section of commoners, who are unfamiliar with the bourses. Is it a challenge to attract them?

LIC's IPO will expand India's stock market. Several people have already opened demat accounts now. If a policy owner has to apply for shares, s/he has to link the policy with her/his PAN number. So far, 6.5 crore policy owners have linked their PAN numbers. A mojority of the 6.5 crore linked the PAN with their policies in recent days. LIC agents helped policyowners to link the PAN and also to open demat accounts. Agents are also informing owners of IPO-related technicalities such as discount, share lot, etc.

What is your message for those investing in LIC's IPO?

The market is unpredictable. Even a common man can now invest in stocks. The investments should be long-term, not just in the case of LIC, bit in any stocks.

Several people are apprehensive over investing in the stock market following the recent failures of several high-profile IPOs. What do you have to tell them?

They need not be apprehensive over the LIC's IPO. The share value is justifiable, and several discounts, too, will be on offer to different investors. Hence, there is no need for concern.

Certain quarters have criticised LIC's move to go public?

It doesn't matter. The government's holding will never go below 51 per cent. The government will be the majority stakeholder, and it is the law. LIC will continue as a government entity.

Are there any relaxations for LIC agents?

Agents have the retail investment option. If s/he is a policy owner, s/he could utilise the 'policyholder' option to submit two applications. The agents, however, won't have the employee option since they are not staff members. 

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