Centre’s big push to mega IPO

Centre’s big push to mega IPO

Subject : Economics

Context : The Centre has now taken another major step towards making insurance behemoth LIC IPO ready by bringing into effect from Wednesday all the 27 legislative changes made to the Life Insurance Corporation Act 1956 through this year’s Finance Act.

Concept :

• With this move, the legislative ecosystem to go ahead with the IPO – expected to be the largest ever and could net the exchequer about ₹1 lakh crore – is now in place, say insurance industry observers

Initial Public Offering

• IPO is the selling of securities to the public in the primary market.
• Primary market deals with new securities being issued for the first time. It is also known as the new issues market.
• It is different from secondary market where existing securities are bought and sold. It is also known as the stock market or stock exchange.
• It is when an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public.
• Unlisted companies are companies that are not listed on the stock exchange.
• It is generally used by new and medium-sized firms that are looking for funds to grow and expand their business.