LIC Listing, IDBI Bank Stake Sale News: Did you check this latest development?

Economic situation across the world has become shaky due to lockdown imposed in the wake of coronavirus-caused Covid-19 pandemic. Now, it has been reported that the much talked about listing of Life Insurance Corporation (LIC) and sale of government's stake in IDBI Bank may be delayed beyond March 2021, due to depressed valuation amid COVID-19 pandemic, as per a report by news agency PTI. Given the prevailing market situation, it seems to be difficult to do the LIC stake sale in the current fiscal as the situation is not conducive, the report adds. Also, the report says there will not be a matching appetite for the mega issue of LIC in the present market condition.

Eyeing Rs 90,000 crore 

The government aims to garner Rs 90,000 crore from the listing of LIC and stake dilution in IDBI Bank out of total the disinvestment target of Rs 2.10 lakh crore during the current fiscal. Finance Minister Nirmala Sitharaman while presenting the Budget 2020-21 had announced stake sale in LIC through an initial public offer in the current financial year. 

The government currently owns 100 per cent in LIC, while it holds around a 46.5 per cent stake in IDBI Bank.

Market participants had already termed the listing of insurance behemoth LIC as IPO of the decade akin to the Saudi Aramco listing.

BPCL privatisation

Due to COVID situation, the government recently for the second time extended the deadline for bidding for privatisation of India's second-biggest oil marketing company Bharat Petroleum Corp Ltd (BPCL) by over a month to July 31.

LIC

The 60-year-old state-owned firm, LIC is the country's largest insurer, controlling more than 70 per cent of the market share. The insurer has a market share of 76.28 per cent in number of policies and 71 per cent in first-year premiums. LIC has many subsidiaries, including IDBI Bank.

IDBI Bank 

Turning the corner, IDBI Bank on Saturday posted a profit of Rs 135 crore for the March quarter on account of recoveries from bad loans. The lender reported a profit after 13 straight quarters of net losses. The bank had posted a net loss of Rs 4,918 crore in the corresponding period of last year.

In January 2019, LIC completed acquisition of 51 per cent controlling stake in the lender. The state-owned life insurer infused Rs 21,624 crore into the bank. The bank, which is under the Reserve Bank of India's prompt corrective action (PCA) framework, said it has achieved all PCA parameters for exit except return on asset.