The government’s wish is to IPO of LIC this financial year, but under consideration
The government will decide on the Initial Public Offering (IPO) of Life Insurance Corporation (LIC) in the “best interests of investors”, a senior official said on Thursday. Six, following in the footsteps of the Finance Minister, who said the center was open to review plans because of the escalation in the Ukraine crisis.
Tuhin Kanta Pandey, Minister of Investment and Public Asset Management (DIPAM), said that while the government looks forward to launching the state-owned life insurer’s IPO in the current fiscal, it is a “dynamic situation”.
Meanwhile, LIC’s employee union has decided to step up pressure against the government’s IPO Plan.
That comes a day after an exclusive Reuters report showing that bankers advising LIC on its IPO pushed the government to postpone the launch of the stock offering amid market turmoil. wobbled by Russia’s invasion of Ukraine, according to two sources close to the matter. with conversations.
After being upbeat last week about LIC’s prospects despite deteriorating market conditions, finance minister Nirmala Sitharaman told the media on Tuesday that the center was open to the timing of its launch. IPO due to current market conditions.
Ms. Sitharaman said in an interview with Business Line, when referring to the time of offering LIC. “Now, there’s an all-out war. So I need to go back and look at the situation.”
In India’s most prominent share offering, the government plans to raise around $8 billion by selling a 5% stake in LIC this month before the fiscal year ends on March 31. The offering is also important as it will help New Delhi raise capital for the budget. spending.
However, given the market volatility caused by the Ukraine-Russia war, it may be time to rethink the timing of selling LIC shares.
The DIPAM secretary said: “There are certain unforeseen events happening right now. We are watching the market closely and certainly, whatever the government will do, we will do. in the best interests of investors and the IPO”.
Speaking at the Seventh National Conference on Economics and Competition Law, 2022, he also said the government’s desire to develop an IPO of a state insurance company this financial year.
The financial year will end on March 31.
“It’s always been our wish, but now with this crisis it’s also a very dynamic situation. We’re watching (the situation) closely, and as you know you’re dealing with it. market all the time, so we Mr. Pandey insists.
He said professional advisers would guide the government and any decision taken, it would be in the best interests of investors and stakeholders.
“LIC isn’t really any strategic investment, but yes, it’s a very important event, as LIC is a very old institution that aims to expand public ownership. It’s also one of those. important government targets. We have included several lists in the recent past such as Railtel, IRCTC, among others,” said the DIPAM secretary.
He also said that a number of new Demat accounts have been opened due to LIC’s IPO proposal.
“LIC alone has brought something like a new demat account crore (de-materialization.) Now the number of Demat accounts has grown to more than 8 crores and a huge amount of new energy is also coming to investors. retail,” he added.
The sell-off in global markets following Russia’s invasion of Ukraine and subsequent Western sanctions has left companies cautious about IPOs, with some halting their plans. . Chinese fashion retailer Shein, London-based GCP Co-Living REIT and German prosthetic manufacturer Ottobock have shelved their planned IPOs.
If the LIC’s IPO is delayed, it will add to a growing list of offerings expected to be postponed as the battle reduces investors’ appetite for risky assets.
