Will LIC stake sale ignite a big privatisation push? Key things to kno

LIC made its debut on the stock exchange after the government divested a 3.5% stake in the insurance behemoth.

The stock began trading on a weak note, slumping about 8% from the issue price of 949 rupees (€11.67, $12.24).

LIC-IPO listing marks an important step in Modi's drive to "monetise and modernise" state-run firms and plug a burgeoning fiscal deficit.

The stake sale will give a boost to the Modi government's efforts to raise much-needed cash through privatizations.

The sale is also an important part of the government's privatisation initiative for 2022.

Back in 2016, the Modi government had announced its intent to privatize many government-owned enterprises.

"The privatisation of Air India and the listing of LIC, signals for the first time that the government is serious about privatization and disinvestment," Suyash Rai, deputy director and fellow at Carnegie India told DW.

The government, however, set a lower target for asset sales for the upcoming fiscal year, at 650 billion rupees, which is less than the current fiscal year's target of 780 billion rupees.

The government is also likely to face strong opposition if it ramps up the privatisation of state-owned entities.