Life Insurance Corporation’s initial public offering could result in job losses and impact the insurer’s social infrastructure spending plans, said one of its trade unions. Rajesh Kumar, general secretary of All India LIC Employees’ Federation said that the insurer may focus on ‘profit maximising investments’ after the IPO instead of the goal it was formed for.
Kumar said that the LIC was formed to provide insurance to rural and social and economically backward people, Kumar told Bloomberg in an interview. The company has been funding capital-intensive infrastructure projects such as roads, railways and power for over 60 years. However, the IPO might motivate the company to go after ‘profit maximising investments’.
The trade union that represents 4,000 employees has written to Prime Minister Narendra Modi and members of the parliament as a protest against the listing. It is also planning to campaign against the sale.
“We believe that selling national assets is a willfully disruptive policy. Recruitment will be minimal, outsourcing will happen and job losses will take place,” he said.
The government is aiming to dilute as much as 10 per cent stake in LIC as part of a broader divestment target. The sale could value the company as much as $261 billion, as mentioned by Jefferies India analysts.
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