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    LIC employees to strike on March 28-29 against the IPO

    LIC employees to strike on March 28-29 against the IPO

    LIC employees to strike on March 28-29 against the IPO
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    By CNBCTV18.com  IST (Published)

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    The AIIEA has opposed the IPO move and said it is the first step towards privatisation of LIC. Lakhs of insurance workers will protest the move. The AIIEA has also announced a two-day strike on March 28-29.

    Ahead of the mega IPO of the Life Insurance Corporation of India (LIC), the All India Insurance Employees Association staged a nationwide demonstration on Sunday. The AIIEA has also announced a two-day strike on March 28-29. It believes that the nation’s largest-ever IPO is the “first step towards privatisation” of LIC and will “compromise with the interests of the policyholders”.
    The LIC Employee’s Union has come in support of the AIIEA and announced that 1.25 lakh insurance workers will join the protest and go on strike on the day of the IPO launch. Workers will boycott the workday of the IPO launch and 10 central trade unions will also join the protest against the new labour codes and the privatisation spree of the government, informed AK Bhatnagar, vice-president of AIIEA to Newsclick.
    The LIC filed a draft red herring prospectus with the Securities and Exchange Board of India (SEBI) on Sunday. LIC said that it will offer 31.6 crore equity shares at a face value of Rs 10 each. These will be sold in the IPO to raise Rs 60,000 crore to Rs 75,000 crore. In this, 10 percent shares will be reserved for policyholders of LIC. They will also be given a discount on the IPO issue price. SEBI is expected to give a nod for the IPO in the next three weeks.
    Bhatnagar claims that after the IPO, LIC may behave like other private companies and shift its focus toward the elite section of society to charge high premiums rather than focusing on increasing the number of policies in the nation.
    “Consequently, the poor and social insurance will suffer. The average premium size of LIC is Rs 11,000 as against Rs 50,000 in the private sector, which targets the creamy layer.” Bhatnagar said in the report.
    LIC currently has one lakh employees and 13 lakh agents across the nation. It was created by the Jawaharlal Nehru government in 1956 by nationalising the life insurance business and taking over 245 foreign and domestic companies. The government then aimed to provide security to policyholders and mobilise their small savings to convert them into capital for long-term investment.
    Today, the estimated embedded value of LIC is around Rs 5.4 lakh crore. As per a Crisil report, in terms of insurance premiums, LIC is the third-largest company in the world.
    The IPO of LIC is part of the Centre’s target of generating revenue estimates of Rs 78,000 crore from disinvestment proceeds in the current fiscal.
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