Irrespective of whether it was the UPA or the current NDA government, LIC has been the major investor in these disinvestment programmes.
Last week, the Indian Government decided to sell over 63 crore shares in Coal India -- world's largest coal miner -- to raise Rs 22,600 crore.
This money is nearly half of what the government intended to raise through disinvestment of public sector companies in the current fiscal.
Interestingly, nearly 50% of the total shares, or worth Rs 10,200 crore, came from Life Insurance Corporation (LIC).
Also Read: LIC to the rescue: Buys almost 50% of shares of Coal India disinvestment
Irrespective of whether it was the UPA or the current NDA government, LIC has been the major investor in these disinvestment programmes.
The chart below explains that in the recently concluded Coal India disinvestment, LIC picked up nearly half of the shares on offer.
This is not the first time LIC came to the government's rescue. In the ONGC disinvestment, LIC picked up 84% of the total shares on offer and paid a massive Rs 11,450 crore while the rest pumped in merely Rs 1317 crore.
The chart shows SAIL disinvestment where LIC bought 70% of the shares on offer. LIC paid Rs 1070 crore out of the total Rs 1517 crore that the government raised in SAIL disinvestment.
From disinvestment of Nalco to Rashtriya Chemicals and Fertilisers (RCF), every time the government has decided to sell shares to the public and institutions to raise money, LIC invariably was at the forefront of lapping up shares.
In RCF, LIC bought 3.2 crore shares on offer, or 46.5% of the total offer.
In Nalco, LIC spent Rs 236 crore to buy 35% of the total shares on offer for disinvestment.
In earlier disinvestment drives, LIC bought around 2.3 crore shares of Hindustan Copper (HCL) worth R350 crore. The government had offered 5.2 crore shares in the state-owned copper mining and manufacturing company.
The regulations of IRDA clearly state that an insurance company cannot hold more than 10% of the paid up capital in any company. The government, in 2012, relaxed this rule for LIC and raised the limit to 30%.
With nearly Rs 22,000 crore yet to be raised in less than 60 days to meet the target by Finance Minister Arun Jaitley, it would be interesting to see how much more money does LIC pump in the government's kitty.
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