The Finance Ministry has granted a significant exemption to the government-owned Life Insurance Corporation of India (LIC) from the mandatory minimum 25 per cent public shareholding rule, LIC announced on Thursday.
This rule stipulates that an entity with a market capitalization exceeding Rs 1 lakh crore must ensure a minimum 25 per cent public shareholding within five years of being listed.
LIC, having debuted on the bourses on May 17, 2022, was initially required to meet the 25 per cent public shareholding requirement by 2027. However, the insurance giant has been granted a noteworthy extension of 10 years from the date of its listing, now extending the deadline to May 2032.
In a regulatory filing, LIC stated, "The Department of Economic Affairs, Ministry of Finance, through an Office Memorandum dated December 20, 2023, has made a decision in the interest of the public to provide Life Insurance Corporation of India with a one-time exemption to achieve the 25 per cent Minimum Public Shareholding (MPS) within 10 years from the date of listing, i.e., until May 2032, under Rule 19A (6) of the Securities Contract (Regulations) Rules 1957."
This exemption represents a significant move that allows LIC a more extended timeline to align with the mandatory public shareholding norms, recognizing the complexities and scale of operations involved in achieving this requirement within a shorter timeframe.
(With Agency Inputs)
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