LIC’s initial public offer (IPO), which will be the largest ever IPO in India, is expected in March 2022. Some concerns are growing over transfer of surplus to policyholders & shareholders. However the government has assured that the policyholders would be fully taken care of for whatever has been committed to them. Bonus to policyholders is not going to be reduced. So far, LIC was paying 95% of its surplus to policyholders and 5% to the government. Section 28 of LIC Act was amended through the Finance Act 2021 to change the ratio to 90:10 for policyholders and shareholders respectively when it becomes a joint-stock company after the IPO.

LIC’s IPO is crucial for government to meet its disinvestment targets for the current FY.