LIC (Indians Trust & Believe) is for sale!

Life Insurance Corporation (LIC) is not just an organization. It is almost a surname for all Indians since 1956. There is no exaggeration to say that almost every household in the country has a policy on LIC. Modi government is all set to privatize this golden duck, which continues to make good profits with assets and investments of lakhs of crores. The government is preparing to bring up the IPO issue in March itself. Trade unions and financial experts are concerned that the government will completely "privatize" LIC by selling more shares in the future. LIC is a leading public sector insurer. The company owns assets and investments worth lakhs of crores. The company has been on a profitable path since its inception.

Not only that, there are many instances where many public sector organizations depend on the government for financial assistance. In contrast, there are many instances where the LIC has backed the government. Despite the entry of private life insurers into the country after the financial reforms, it is getting closer to the policyholders by withstanding the competition and bringing in new insurance schemes from time to time as well as providing technology. Before the formation of LIC, private insurance companies in our country did not care about Indians at all. Life insurance policies are not offered to Indians except for Europeans. The situation is the same for wealthy Indians. LIC had a monopoly on the life insurance market until twenty years ago. In 1999, the government allowed the private sector into the insurance sector.

Even though there are currently 23 private insurance companies, LIC is still the leader in the life insurance market. As of March 2021, LIC accounted for 66% of premium income and 75% of policies. The company had posted a net profit of 1,437 crore for the six months ended September this fiscal. The capital raised by the government in 1956 for setting up LIC was only 5 crore. The government has so far paid 28,695 crore in dividends on that investment. In return, LIC had to invest in some companies because of government pressure. IDBI Bank is one of them. Under government pressure, LIC lost a majority stake in the bank's equity. It is believed that public confidence in LIC policies could be eroded if the company goes IPO and starts selling shares in the company. In the current market boom, the sale of a 5% stake in LIC equity could fetch the government between 75k crore and 100 crore.