LIC (Life Insurance Corporation of India), the country’s largest insurer, would be asked by the finance ministry officials to pick up 5-10% of the government’s stakes in the public sector undertakings (PSUs).
This move will be a part of the Indian government’s efforts to raise Rs 40,000 crore through disinvestment. The cash-rich LIC is the biggest domestic institutional investor in India and it has already set aside more than Rs 40,000 crore for investing in public as well as private sector companies this financial year.
According to financial ministry sources, “LIC would be asked to pick only small portion (5%-10%) in some PSUs.”
The Department of Disinvestment has floated a Cabinet note that seeks to ask cash-rich companies to buy back shares in PSUs. This decision has been taken to further the government’s efforts in meeting its disinvestment target of around 40,000 crores against which it has managed to raise only Rs 1,145 crore so far.