LIC IPO – India’s Biggest IPO of 2021
In this year’s budget, which was presented during an unprecedented financial crisis, the government has taken some bold fundamental decisions. This will have a positive effect on LIC IPO and aggressive export policy. LIC IPO is set to become the largest IPO in India
Lets Start With GDP of India
As per the revised estimate for the financial year 2021, the government has projected a fiscal deficit of 9.5 per cent. Of course, about 2 per cent of GDP is due to food and fertilizer subsidies. These issues were set aside in the previous budget (from the Food Corporation of India). The fiscal deficit for the fiscal year 2022 is assumed to be 6.8 per cent. Which is generally considered the ideal situation in terms of deficit. The deficit will be higher than that (5 per cent of GDP). The bold decisions taken by the government at a time when the government is facing the burden of fiscal deficit are commendable.
Accelerating economic growth appears to be the main objective of this budget and the Ministry of Finance has decided to use Capex or Itfa Investment. The Finance Ministry has made a major increase in the provision of health facilities and the decision was expected after the spread of Kovid-19.
It has also decided to increase government investment in a number of infrastructure schemes, including roads and water supply (Jal Jeevan Mission). A number of important fundamental decisions have been made, which have been the hallmarks of this year’s budget. Here are some of the
Budgets F.Y 2021-2022
Union Finance Minister Nirmala Sitharaman presented the budget for the year 2021-22 on February 1. The country saw its biggest decline in four decades in both nominal and real GDP. Against this backdrop, presenting the budget was a daunting task. There is no big package in this budget. No tax hike has been made. However, the government has done well in economic maths and bold decisions have been announced.
Key Decisions of Budgets
- Establishment of Development Finance Institution (DFI).
- Establishment of Asset Reconstruction Companies (ARCs) and Asset Management Companies (AMCs) to address the problem of bad debts.
- Comprehensive Asset Motivation Plan.
- Announcement of scalping plan for fifteen and twenty year old vehicles.
- Limit foreign direct investment (FDI) in insurance to 74%
- Investments in two public sector banks and one general insurance company
- Similarly, there are no negative decisions at the tax level, but many long-term fundamental reforms are included in this budget. It shows signs of medium-term economic progress.
- A bold decision regarding the stock market will speed up the investment cycle.
- The path of progress started from one sector will gradually bring about rapid changes in the markets of cement, vehicles, BFSI, metals and capital goods. This means focusing on the market as a whole.
LIC of India – Company
As per the statistics for the financial year 2019, Life insurance corporation of India has 3 lakh employees. LIC also has 20 crore policyholders. Therefore, with the advent of LIC’s IPO, the market share of retail equity shareholders will increase manifold.
The government will have a tendency to expand the market base of general investors through LIC’s IPO. If a concession like special discount is offered by the government in case of this IPO or special reserve shares for unit holders and employees, it will increase the interest of many and expand the overall stock market base, increase the participation of general investors.
Everyone was wondering when the IPO of LIC, the life insurance corporation, would come out this year. This is a sign of the largest IPO in India. The size of the IPO will have a major impact on stock market ratings and all other factors, and will definitely boost the credibility of the Indian market compared to all other stock markets in the world, including MSCI. An increase in ratings will increase the inflow of foreign investment into the Indian market. In terms of market capitalization, LIC will be the largest company in the country, along with Reliance Industries, TCS and HDFC Bank.
Key Point of LIC Initial Public Offer
- LIC IPO will accelerate the overall developments in the capital market.
- This will give small investors the opportunity to buy shares of large companies, but from an overall stock market perspective, this budget is extremely encouraging.
Reason for LIC IPO Announcement
- The export target for the financial year 2022 has been set at Rs 1.75 lakh crore.
- The government has set a target of Rs 2.1 lakh crore for investment in 2021 as well.
- The government aims to raise Rs 90,000 crore through strategic sale of shares of public sector banks.
- The government has decided to raise the remaining Rs 1.2 lakh crore by selling shares of other state-owned companies.
- Of course, due to Kovid-19, all the process of export has been left aside. In the financial year 2022, the government has once again set a huge target for this, and a large amount of investment is proposed.
Note: Apart from public sector banks, investments will be made from BPCL, Air India, Concar, Shipping Corporation of India, Pawan Hans, IDBI Bank, BEML, Nilachal Ispat Nigam and many more.
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