The government defended the “bailout” of recent PSU stake sales by Life Insurance Corporation of India (LIC), saying it bid for those shares to boost returns for policyholders rather than to shore u
p state finances, said a bureaucrat set to lead such sales.
The muted response of institutional and retail investors during the recent stake sales by the government has taught lessons that would be the bedrock of the government’s disinvestment strategy next fiscal year, he said.
“LIC takes its decisions based on commercial factors,” disinvestment secretary Sumit Bose told in an interview. “It bid for REC as well, but it was outbid by other institutions. But LIC’s equity drive is not just for public sector companies. It is a big investor in IPOs of private companies as well.’’
Power utility NTPC’s Rs 8,200-crore follow on offer and miner NMDC’s Rs 9,900-crore issue were mostly bought by LIC. The share sale in Rural Electrification Corp, or REC, a state-run lender for power companies, got bids from foreign funds.
