The Congress has criticised the Centre over the stock market listing of Life Insurance Corporation (LIC), claiming that the shares have been "significantly undervalued."
A Congress statement asked, "Why was the LIC valuation of ₹ 12-14 lakh crore in February 2022 reduced to ₹ 6 lakh crore in just two months? While filing the prospectus in February 2022 for this mega IPO (Initial Public Offering), LIC disinvestment was aimed at 2.5 times the embedded value (EV), but now the valuation of the IPO is towards 1.1 times its embedded value. Comparably, HDFC Life Insurance is trading at 3.9 times EV, and SBI Life and ICICI Prudential Life trade at 3.2 times and 2.5 times their embedded value respectively."
The statement by the Congress said, "Why did Modi government suddenly reduce the 'Valuation of LIC' and 'Issue Size' after roadshows in India and abroad? Is the Modi government ignoring LIC's key indices? And why is the government trying to sell LIC when Domestic and Global Financial Markets are in turmoil on account of the Russia-Ukraine War and a host of factors leading to the economic downturn?"
The Centre has stated that it expects to raise up to ₹ 21,000 crore, just a third of its original target, from selling a 3.5 percent stake in LIC in the country's biggest IPO.
(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)