In an apparent bid to successfully complete the proposed mega LIC initial public offering (IPO), the Centre on Sunday extended the term of the incumbent Chairman MR Kumar by one more year. This is expected to ensure continuity at leadership level and provide comfort to key institutional investors — who are looking to participate in the IPO — about stability at the Board level post the IPO and even if the proposed mega offering gets delayed beyond March 2022. The Centre also extended the tenure of Raj Kumar, Managing Director of LIC, by one year beyond January 31. This is the second extension for MR Kumar, whose term was to end on June 30 last year, but was given a nine-month extension until March 13 this year, when he is due to complete three years as Chairman. Now his term has been extended till March 13,2023, sources said. These extensions has been done as a one time measure and cannot be quoted as precedent, according to the decision taken by the Appointments Committee of the Cabinet.
LIC’s public issue
The Centre is betting big on the mega LIC IPO and targeting to raise about ₹1 lakh crore. A few days back DIPAM Secretary Tuhin Kanta Pandey had said that LIC will list in bourses by March 31 this year. The mega LIC IPO is crucial for meeting the ₹1.75-lakh crore disinvestment target set for the current fiscal. The draft papers for the LIC IPO are still being finalised and expected to soon be filed with SEBI for approval. Being a government company, the approval process at SEBI is expected to be fast tracked, sources said.
Meanwhile, the Centre’s decision to give one-year extension to the term of MR Kumar is also a clear pointer that he will not be appointed as the Chairman of insurance regulator IRDAI, say insurance industry observers.
The post of IRDAI Chairman has been vacant for nine months now after erstwhile Chairman Subhash Khuntia demitted office on May 5 last year.