LIC shares in focus as PSU insurer gets more time to comply with minimum public holding norms

Shares of Life Insurance Corporation of India Ltd will be in focus on Friday morning after India's largest life insurer said it has received a one-time exemption to achieve 25 per cent minimum public shareholding (MPS) norms within 10 years from the date of listing i.e. till May 2032 under Rule 19A (6) of the Securities Contract (Regulations) Rules (SCRR) 1957.

"This is to inform you that the Department of Economic Affairs, Ministry of Finance vide Office Memorandum dated December 20, 2023 has decided in the public interest, to grant one-time exemption to Life Insurance Corporation of India to achieve 25% Minimum Public Shareholding (MPS) within 10 years from the date of listing i.e., till May 2032 under Rule 19A (6) of the Securities Contract (Regulations) Rules (SCRR) 1957," LIC said in a BSE filing.

According to SEBI norms, a company is required to have a minimum public shareholding of 25 per cent within three years of listing or one year of the merger or acquisition. Besides, Sebi's minimum public shareholding norms suggest that listed entities with a valuation of over one lakh crore could meet 25 per cent public shareholding within five years of listing.

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LIC, which made market debut in May 2022 was thus required to meet the MPS norms by 2027. The government had sold 3.5 per cent stake in the insurance behemoth in the IPO. It held the remaining 96.50 per cent in the life insurance company at the end of September quarter, as per data available with stock exchanges.

Earlier this year, the Centre amended the securities contracts(Regulation) Act for Strategic disinvestment to exempt listed companies in which the government and public sector undertakings (PSUs) together or individually hold majority stake from the minimum public shareholding norm.

At Thursday's close of Rs 764.55, shares of LIC were trading at 19.43 per cent discount to the IPO issue price of Rs 949. The stock is up 25 per cent in the last one month and 7.78 per cent in 2023 o far.

For the September quarter, LIC reported a 19 per cent decline in net premium income a Rs 1.07 lakh crore compared with Rs 1.32 lakh crore in Q2FY23. The first-year premium for the reporting quarter increased to Rs 9,988 crore, as against Rs 9,125 crore in the year-ago period.

 

 

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