LIC gets 10 years to meet 25% public float norm – Industry News –

LIC gets 10 years to meet 25% public float norm – Industry News

The government has given state-run Life Insurance Corporation (LIC) a 10-year window to meet the Minimum Public Shareholding (MPS) norm of 25%, given the volatility in the insurance behemoth’s share price since listing in May 2022.

According to Securities and Exchange Board of India norms, a company is required to have an MPS of 25% three years after listing. For state-run companies, however, the government is empowered to provide relaxations in this regulation.

Since LIC’s listing in May 2022, the insurer’s stock has taken a beating, falling 35-40% below the IPO issue price of Rs 949 a share earlier this year. The stock has improved in recent weeks, partly due to the improved stock market sentiment. LIC’s share price closed at Rs 764.55 on the BSE on Thursday, up 0.52% from the previous close. This is still 19% lower than the issue price.

The government, which holds 96.5% in the insurer, is not keen to dilute its stake further till the stock price improves.

“…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 informed the stock exchanges on Thursday.

The LIC Board is working on five to six key areas to prop up its share price, including higher dividend payouts or bonus issues, deployment of modern technologies and roping in top IT talent laterally from the market to boost productivity and improve communication with investors.

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