The Cabinet Committee for Economic Affairs (CCEA) has approved part divestment of the government stake in Life Insurance Corporation of India (LIC) through an initial public offering (IPO).

The size of the IPO and the extent of the government’s stake dilution in the country’s largest insurer would be taken up by the Alternative Mechanism comprising Finance Minister Nirmala Sitharaman and Minister of Road, Transport and Highways Nitin Gadkari, among others.

According to a government official, the Cabinet gave its nod for the LIC IPO last week. This is in line with a series of changes made by the government ahead of the proposed IPO. Last week, the Department of Financial Services (DFS) notified that the executive chairman of LIC would be gradually phased out. A post of chief executive officer (CEO) would be created. To make the functioning of the insurer driven by its board, several rules have been amended. The purpose is to empower the board to make decisions regarding pension schemes, among others. These changes have been undertaken to restructure the insurer in line with the Securities and Exchange Board of India (Sebi).