Government provides one-time exemption to LIC to attain 25% MPS in 10 years

The government has granted a one-time exemption to Life Insurance Corporation of India (LIC) for achieving a 25 per cent Minimum Public Shareholding (MPS) within a 10-year period.

LIC, the country's largest insurer, was publicly listed in May 2022, with the government selling a 3.5 per cent stake through an Initial Public Offering (IPO), reducing its ownership to 96.5 per cent. 

The Department of Economic Affairs has approved this exemption, allowing LIC to meet the 25 per cent MPS requirement by May 2032.

Earlier in the year, regulatory amendments were made so that listed state-run entities, including banks, would be exempt from the 25 per cent MPS rule even after privatisation, provided the government deems it "in public interest." 

The extension, enacted in January, aims to enhance the attractiveness of acquiring state-run companies for investors. 

Notably, this exemption was previously limited to government-controlled entities. In July 2021, the government had already exempted all listed public sector units from the MPS requirement.

The shares of LIC settled 0.52 per cent higher at Rs 764.55 per share, on December 21.