Opposition parties criticised the Central Government for offloading its stake in Life Insurance Corporation of India (LIC) in the form of Initial Public Offering (IPO) that opens on May 4. They called it a first step towards destruction of the public character of LIC that holds two-third of the insurance market.
In a statement, Communist Party of India (Marxist) [CPI(M)] Polit Bureau expressed concern at the scaling down of the valuation of the LIC share which, it alleged, was done under pressure from the international investors out to make a quick buck.
“The latest estimate of Embedded Value (EV) of LIC was pegged at ₹5.40 lakh crore. About two months ago, it was expected that the real worth of each LIC share would be arrived at by applying a multiplication factor of between 2.5 and 3. However, cajoled by international investors, the government is now trying to scale down the valuation dramatically by using a multiplication of just 1.1 times LIC’s estimated EV,” the party said. This smacked of gross impropriety and financial wrongdoing, it stated.
