In an apparent attempt to complete the proposed mega LIC initial public offering (IPO), the Center on Sunday extended the term of incumbent chairman, MR Kumar, for another year. This should provide continuity at the management level and reassure major institutional investors – who seek to participate in the IPO – of stability at the board level after the IPO and even if the mega proposed bid is delayed beyond March 2022. The Center has also extended the term of LIC Chief Executive Raj Kumar by one year beyond January 31. This is the second extension for Mr Kumar, whose term was due to end on June 30 last year but received a nine-month extension until March. 13 this year, when he is due to complete three years as president. Now his term has been extended until March 13, 2023, sources said. These extensions were made all at once and cannot be cited as a precedent, according to the decision taken by the Cabinet Appointments Committee.
The public issuance of LIC
The Center is betting big on LIC’s mega IPO and aims to raise around ₹1 crore lakh. A few days ago, DIPAM Secretary Tuhin Kanta Pandey said that LIC would be listed on the stock exchange by March 31 this year. LIC’s mega IPO is crucial in achieving the 1.75 lakh crore divestment target set for the current fiscal year. Draft documents for the LIC’s IPO are still being finalized and are expected to be filed with SEBI for approval soon. As a government-owned company, the approval process at SEBI should be expedited, sources said.
Meanwhile, the Centre’s decision to extend Mr Kumar’s term for another year also makes it clear that he will not be appointed chairman of insurance regulator IRDAI, according to insurance industry watchers.
The position of IRDAI President has been vacant for nine months now after former President Subhash Khuntia stepped down from office on May 5 last year.
January 30, 2022