New Delhi: Fitch Ratings believes the proposed initial public offering (IPO) of Life Insurance Corporation (LIC) will improve the accountability and transparency of the country’s largest insurance company.
Fitch Ratings also said on Wednesday that LIC’s IPO would benefit the entire insurance industry. Fitch said the insurance industry will probably benefit from it. The industry will be able to attract more foreign capital, which will also increase the flow of foreign capital into the country. Fitch said it hoped that once LIC’s IPO came, some private sector insurance companies would also be encouraged to list their shares in the stock market in the medium term. However, it is not mandatory for all insurance companies to be listed under the existing regulations.
Finance Minister Nirmala Sitharaman announced in her 2020-21 budget speech that LIC would be listed as part of the government’s disinvestment initiative. The government currently holds 100 percent stake in LIC. Fitch said publicly listed LICs would have to meet more stringent disclosure rules. This will create a strong culture of compliance and accountability within the company itself.
