The post is contractual and the CFO would get remuneration of about Rs 75 lakh per annum
IPO-bound Life Insurance Corporation (LIC) has appointed Sunil Agrawal as its chief financial officer (CFO). Agrawal took charge on Wednesday, sources said. This is the first time that LIC has appointed an outsider as CFO. Prior to this, LIC Executive Director Shubhangi Sanjay Soman was holding charge as CFO of the insurance behemoth. Agrawal was earlier the CFO of Reliance Nippon Life Insurance for over 12 years. He was also associated with ICICI Prudential Life Insurance for 5 years.
LIC had in September invited applications for the post of CFO. The post is contractual and the CFO would get a remuneration of about Rs 75 lakh per annum. The appointment will be for a period of three years or the candidate attaining 63 years of age, whichever is earlier. LIC was preparing to go public in March itself. However, the prevailing geopolitical volatility triggered by the Russia-Ukraine conflict may defer the mega IPO. Finance Minister Nirmala Sitharaman too had indicated a review of LIC’s initial public offering (IPO) in view of the evolving geopolitical situation.
“Ideally, I would like to go ahead with it because we had planned it for some time based purely on Indian considerations,” Sitharaman had said in an interview with the Hindu Business Line. “But if global considerations warrant that I need to look at it, I would not mind looking at it again.” The Russia-Ukraine war entered its eighth day on Thursday, with fighting intensifying in Ukrainian capital Kyiv and other big cities. The government was expecting to garner Rs 63,000 crore by selling 5 percent stake in the life insurance firm to meet the curtailed disinvestment target of Rs 78,000 crore in the current fiscal.
If the IPO is deferred to the next fiscal, the government would miss the revised disinvestment target by a huge margin. So far, the government has raised Rs 12,030 crore through CPSE disinvestment and Air India’s strategic sale this fiscal. The government had earlier projected to garner Rs 1.75 lakh from disinvestment during 2021-22. The IPO is offered for sale (OFS) by the Government of India and there is no fresh issue of shares by LIC. The government holds 100 percent stake or over 632.49 crore shares in LIC. The face value of shares is Rs 10 apiece.
The LIC public issue would be the biggest IPO in the history of the Indian stock market. Once listed, LIC’s market valuation would be comparable to top companies like RIL and TCS. So far, the amount mobilised from IPO of Paytm in 2021 was the largest ever at Rs 18,300 crore, followed by Coal India (2010) at nearly Rs 15,500 crore and Reliance Power (2008) at Rs 11,700 crore. Last week, the government had permitted up to 20 percent foreign direct investment (FDI) under automatic route in LIC with an aim to facilitate disinvestment of the country’s largest insurer.
The decision in this regard was taken by the Union Cabinet, chaired by Prime Minister Narendra Modi. Foreign investors may be desirous of participating in the mega IPO. However, the existing FDI policy did not prescribe any specific provision for foreign investment in LIC, which is a statutory corporation established under the LIC Act, 1956.