According to Tuhin Kanta Pandey, secretary of the Department of Investment and Public Asset Management, the digital transformation of Life Insurance Corporation of India (LIC) might "really spur... (it) into becoming a very smart organization".
Following the release of the Interim Budget 2024–25, Pandey spoke with Moneycontrol and stated that LIC is "improving very fast on all fronts" and making significant efforts to profitably hold onto its market share. This means discontinuing a few products - even ones with strong growth - and releasing a lot of subpar goods.
"A project aimed at digital transformation has been started. He said, "BCG has been hired."
Pandey declined to respond when asked if these adjustments suggested the insurance giant is significantly more valuable than what the present share price suggests.
"As promoters, we really shouldn't be saying these things. All I'm asking is that you notice the development. We are focusing it (LIC) on the market. The market is catching up," he stated.
For LIC, this digital transformation effort is crucial. And it, in my opinion, will really encourage the LIC to develop into a very intelligent institution. They are looking at it, but their HR also has to be examined," he continued.
After being listed on the exchanges in May 2022, LIC's shares first exceeded the issue price on January 30 and ended the trading day on February 2 at Rs 945.45 on the National Stock Exchange.
As even the thought of listing was "mentally a big leap forward," Pandey added that the road with LIC will be "long." According to Pandey, the insurance business has made "several leaps forward internally" since going public, including acquiring new actuarial software, which brought in more than Rs 20,000 crore for the government.
"That kind of quantitative work, reconciliation, external reporting actuary, and reporting of embedded value for the first time was such an achievement in and of itself. To be honest, I'm still not quite satisfied with the lack of discussion surrounding embedded value. In insurance firms, it's a very significant signal. Thus, embedded value has increased," explained Pandey.
When asked about her thoughts on portions of IDBI Bank's divestiture, the secretary said she was certain it would be finished in 2024–2025. Regarding Bharat Petroleum Corporation Ltd., it appears that the transaction will not be relaunched for some time.
"BPCL we have not really re-launched the transaction yet," Pandey stated. "The energy markets are risky even now. There is suddenly a problem with the Red Sea. Therefore, the government needs to decide. Another significant party that interacts with them is the Ministry of Petroleum. EoI (Expression of Interest) will begin once that is determined," he concluded.
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