LIC has in recent years been a key buyer of shares in state-owned firms sold off by the Government, often bailing out
less-than-successful public issues of shares

LIC has in recent years been a key buyer of shares in state-owned firms sold off by the Government, often bailing out
less-than-successful public issues of shares

Prospective investors in Life Insurance Corporation of India’s (LIC) $8 billion IPO are seeking assurances from the company management that it will not sacrifice their interests to meet the goals set out by the government, its controlling shareholder, sources said.

In virtual roadshows for India’s biggest ever public listing, LIC management and the IPO bankers have been peppered
with questions about the insurer’s past investments and their quality, four people with knowledge of the matter said.

LIC has in recent years been a key buyer of shares in state-owned firms sold off by New Delhi, often bailing out
less-than-successful public issues of shares. It has also been tapped to rescue struggling financial institutions.

Potential conflicts of interest issues are taking centre-stage in the IPO roadshows that began last week and are
expected to go on till the end of the month, the sources said.

“The government tends to act as a regulator, manager and shareholder and it tends to get its position confused at
different points of time,” said Shriram Subramanian, founder of proxy advisory firm InGovern, who has not attended the
roadshows.

“The government ministries may tend to think that LIC is 100% under their control and would like to exert that kind of an
influence whenever required and that is a concern for investors,” Mr. Subramanian added.

How effectively LIC and its investment bankers are able to address the investor concerns will help in determining the
insurer’s valuation in the float, and consequently the state of finances of the Indian government which is banking on proceeds from the IPO to plug an annual fiscal deficit hole.

The Finance Ministry did not respond to emails seeking comment while LIC declined. The sources declined to be
identified as the discussions are private.



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