The government has extended the tenure of chairman of IPO-bound Life Insurance Corporation (LIC) by one more year with a view to facilitating smooth listing of the insurance behemoth, sources said.
Besides, the government has also extended the tenure of one of the managing directors, Raj Kumar, for one year. Raj Kumar was to retire on January 31. With the extension, M R Kumar will continue as chairman of LIC till March 2023, the sources said.
Notifications in this regard would be issued soon, the sources said. This is the second extension for the LIC chairman. Last year in June, he was given a nine-month extension in view of LIC's proposed initial public offering towards the end of the current financial year.
The government had extended the term of M R Kumar from June 30, 2021, till March 13, 2022, the date when he completes three years, the sources said. The government is looking to list LIC during the current financial year in line with the Budget announcement.
In her Budget Speech, finance minister Nirmala Sitharaman had said the initial public offering of LIC will be floated in 2021-22 as part of the ambitious Rs 1.75-lakh crore disinvestment target.
The government owns 100 per cent stake in LIC. Once listed, it is likely to become the country's biggest company by market capitalisation with an estimated valuation of Rs 8-10 lakh crore.
Meanwhile, the government has significantly increased the authorised capital of LIC to Rs 25,000 crore from Rs 100 crore to facilitate the listing. Last week, LIC reported a profit after tax of Rs 1,437 crore for the first half of the financial year 2021-22 as compared with Rs 6.14 crore in the year-ago period.
Its new business premium growth rate stood at 554.1 per cent in H1FY22, compared with 394.76 per cent during the corresponding period of the preceding financial year. The overall total net premiums increased Rs 1,679 crore to Rs 1.86 lakh crore during April-September 2021, from Rs 1.84 lakh crore in the year-ago period.
The state-owned insurer reported a jump of Rs 17,404 crore in overall premiums and income from investments grew to Rs 3.35 lakh crore in the April-September 2021 period.
The overall income from investments grew Rs 15,726 crore to Rs 1.49 lakh crore in H1FY22. Income from interest, dividends and rent (gross) grew to Rs 10,178 crore in H1FY22. Income from profit on sale/redemption of investments increased to Rs 10,965 crore.
LIC's share capital has been increased to Rs 6,325 crore in H1 FY22 on the eve of its IPO.
