The Government of India is planning to sell 5% of its share in LIC. LIC is Life Insurance Corporation. With this, the government is trying to raise Rs 65,000 crores.

What is the plan?

10% of the shares are being reserved for eligible policy holders. These shares will carry discounted prices. The plan is to sell 316.25 million shares. This is 5% of the total equity base. The total equity base of LIC is 6.32 billion shares. The pricing of IPO, Initial Public Offering, has not yet been decided. 35% of the shares are to be reserved for retail investors. Discounts are to be provided to LIC employees.

Significance

The IPO is to help Government of India in achieving its target. In the fiscal year 2021-22, the Government of India had set a divestment target of Rs 2.1 lakh crores. However, the target counldnt be achieved. For the fiscal year, 2022-23, the divestment target is Rs 78,000 crores.