LIC not rescuing government's disinvestment programme: FinMin

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LIC not rescuing government's disinvestment programme:FinMin
Amidst the media reports that government's stake sale in PSUs via Offer-for-Sale (OFS) are mainly salvaged by Life Insurance Corporation of India (LIC), which is also the India's biggest institutional investor, the Ministry of Finance on Monday said that these reports were baseless as FIIs have also evinced good response in such transactions.

FinMin said that during the year 2012-13, the Department of Disinvestment completed 7 OFS transactions - the major ones being Oil India Ltd., NMDC Ltd., NTPC Ltd., and SAIL—helping the government raise Rs 23,830 crore. It added that 39 per cent of this amount came from FIIs, while only about 25 per cent came from Insurance Companies including LIC and less than 10 per cent from Banks including Public Sector Banks.

The finance ministry also said that in four major issues-- Oil India Ltd., NMDC Ltd., NTPC Ltd., and SAIL-- the government had raised Rs 22,087 crore, of which 42 per cent came from FIIs, while Insurance Companies including LIC contributed 22 per cent, and Banks including Public Sector Banks invested less than 9 per cent.

"Government while deciding the pricing of a particular offering take into consideration factors like the strength of the Company, market conditions, investor interest, and participation of all categories of investors, etc.; and fix a very reasonable level of price.

"Given the inherent strength of the Government Companies, long-term investors' participation is good in Government Issues - whether FIIs or Domestic Institutions like LIC," the FinMin said in a statement.

Read more about: lic, disinvestment, ofs
Story first published: Tuesday, July 30, 2013, 9:20 [IST]
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