New Delhi and Bengaluru: “LIC IPO, down, down” slogans resonated at the branches and divisional and zonal offices of the Life Insurance Corporation (LIC) across the country as insurance employees staged a walkout strike for two hours on Wednesday against the opening of its initial public offering (IPO).
More than 90% of class 3 and 4 LIC of the nearly 80,000 employees at numerous offices across the country participated in the strike, jointly called by the All India Insurance Employees Association (AIIEA) and All India LIC Employees Federation.
The Narendra Modi government expects to raise Rs 21,000 crore by diluting a 3.5% stake in the LIC during the three-day subscription.
Insurance employees alleged that the stake sale, which is the “first step to privatise” the LIC, is neither in the interest of its “millions of policyholders” nor the nation. The unions pledged to continue their struggle to “save the LIC” in the coming days by organising public campaigns among the policyholders and challenging the government’s narrative on this matter.
The strike action received an “overwhelming response”, Shreekant Mishra, national general secretary, AIIEA, told Newsclick over the phone from Hyderabad. According to him, the LIC has 2,048 branches, along with 113 divisional offices, and eight zonal offices across the country. “And, almost all of them witnessed the demonstration for two hours by the striking employees,” he said.
Around a hundred employees of the LIC’s northern zone office at Jeevan Bharati building, at Delhi’s Connaught Place, Delhi, struck work. The employees flayed the Centre for bringing down the valuation of LIC—the public insurer is now valued at Rs 6 lakh crore at the higher end of the price band as against the earlier estimates of around Rs 10 lakh crore.
“By bringing down the valuation, the government has betrayed the millions of LIC policyholders, who have built this company over years,” AK Bhatnagar, vice-president, AIIEA told the striking employees.
AK Bhatnagar, vice-president, AIIEA, addresses the striking LIC employees in Delhi. Image: Ronak Chhabra.
Bhatnagar later told Newsclick added that the insurance employees are “very much aggrieved” with the Centre going ahead with the IPO despite “so many concerns”. “The issues were raised not just by the employees but political parties, Central trade unions and other sectoral employees.”
Mishra said the strike was a “symbolic” protest and that the struggle to “save LIC” will continue. “We want to make the general public part of our struggle because this IPO is nothing but the first step to eventually fully privatise the LIC,” he alleged.
The AIIEA, which is among the largest unions representing insurance employees, will hold “close to 10,000” public meetings in different districts of Kerala in the coming weeks. “We are experimenting with this campaign in that state and if successful, we will replicate the same in other states as well,” he added.
In Bengaluru, about a hundred employees at the LIC’s divisional office staged a two-hour walkout. “The government is trying to hand over assets which we have built up at dirt cheap rate. LIC buildings and assets were built by the money of policyholders and the sweat and toil of the agents and the employees,” Amanulla Khan, former president, AIIEA, said during the protest. “How can you hand it over to somebody who did not contribute to the growth just so they can make a profit?”
Newsclick had earlier published an opinion piece on how LIC has been undervalued to benefit retail and institutional investors. The valuation of LIC shares has been done by applying a multiplication factor of 1.1 while smaller insurance companies applied a multiplication factor of 3 or 4. The multiplication factor allows a company to value itself based on future earnings thereby pricing in the growth of the company. This allows the company to raise more funds through a stake sale.
TK Parameshwar, president of LIC employees union (Bengaluru division), told Newsclick, “Only a company not doing well or seeking to raise funds for business goes to the capital market. But the LIC is in a position to give money to other corporations or to even bail out other industries.” LIC had previously bailed out multiple companies like IDBI Bank, IL&FS and others.
“In the last financial year, the growth of the market in terms of new policies was 3.5%. LIC had a growth of 3.56%. Despite the entry of so many private insurance companies, the LIC has a market share of 64%. This clearly shows that people are with LIC,” Parameshwar added.
Most of the protesting employees were unionised clerical staff. A majority of officers didn’t join the strike even with the looming threat of layoff. Geetha SK, who has been with the LIC for 36 years, said, “Policyholder funds are mopped up by the government and reinvested in infrastructure projects. This benefits the public. However, the IPO may benefit only a small percentage of the population. The government only wants to implement its disinvestment policy, not help the public.”