LIC, PSBs asked to buy 5-10% of government stake in PSUs

LIC IndiaIndian finance ministry has reportedly asked Life Insurance Corporation (LIC) and some public sector banks (PSBs) to purchase five to 10 per cent of government stake in public sector units to be auctioned before the end of current financial year.

The Government has a target to dis-invest assets worth Rs 40,000 crore before the current financial year ends on 31st of March.

From the offloading its shares in Power Finance Corporation, the government could pocket only Rs 1,144 crore in disinvestment revenue this year.

Overall, the government could pocket only Rs 22,763 crore from disinvestment proceeds during 2010-11.

Thus, the government is now asking LIC and PSBs to buy a maximum of 10 per cent of its stake in the public sector units so that it could meet its stiff disinvestment target.

Cash-rich LIC, which has already announced its intention to invest money in equities in public as well as private sector companies during this fiscal, said that it would invest if good scripts come at good prices.

When contacted, an LIC official said, “We have not received any official intimation from the government in this regard. However, LIC remains a net buyer and if good scripts come up at good prices, we would invest.”

In addition, the government is mulling over additional measures like buyback and cross-holding to meet its disinvestment targets.