LIC IPO: Bankers may buy time to decide valuations amid market volatility

8 Mar 2022 , 01:13 PM

The much-awaited initial public offering (IPO) of Government-owned Life Insurance Corporation of India (LIC) keeps the investors and policyholders involved in participating the mega IPO this year. However, the market uncertainty due to ongoing Russia-Ukraine war put the investment bankers on dilemma over entering into discussions on the price band.

Further, the volatile market conditions might not be a good time to determine the investors response as it is very critical to analyze the demand for the IPO and comfortable valuations, according to the investors perspective.

Also, many foreign investors can prioritize realigning existing portfolios over fresh investments amid Russia-Ukraine war. However, the interest of foreign investors can play a major role in ensuring the success of the offering.

Hence, investors may have to keep waiting a little longer to determine the right valuations and pricing risks, pushing the IPO beyond March expectantly.

“We are trying to adhere to a tight deadline. But this may not be a good time to seek feedback on the issue given that investors may be more keen on making adjustments to their existing portfolios rather than evaluating fresh investment opportunities,” investment banker involved in the share sale, was quoted by rediff report.

“It will be a cat and mouse game between investors and the government. The issue will be launched only if there is sufficient demand from investors and the government is in agreement with the bankers on the valuations”, also quoted by banker in rediff report. 

According to the data factsheet, LIC is projected to be the third-largest company by market cap on listing after Reliance and TCS. Also, so far, LIC has interacted with 125 investors and is hoping to connect with another 25-35 investors over the next few days, said media report.