LIC IPO likely to get delayed to FY23 amid Russia-Ukraine war

3 Mar 2022 , 02:14 PM

According to the media reports, the government may postpone India’s mega initial public offering (IPO), Life Insurance Corporation (LIC) to the next financial year. The government is likely to hold a meeting to reassess the LIC IPO timing in view of the escalating Russia-Ukraine war.

Last week, the Union Cabinet chaired by Prime Minister Narendra Modi permitted up to 20 per cent foreign direct investment (FDI) under automatic route in IPO-bound LIC with the aim of facilitating disinvestment of the country’s largest insurer.

During a recent interview with Hindu Business Line, Finance Minister Nirmala Sitharaman has “stated the government position” on the matter, the official said, referring to her remarks, where she suggested that the emerging global situation may warrant a relook at the IPO timing.

“Ideally, I’d like to go ahead with it because we had planned it for some time based purely on Indian considerations,” FM Sitharaman told in the interview.

Sher added further, “if global considerations warrant that I need to look at it, I wouldn’t mind looking at it again”.

Further, Russia’s invasion of Ukraine has impacted across global stock markets, including the Indian stock market and also it could impact the timing of the mega public offering, India’s largest, which made up the biggest portion of the country’s asset-sale program aimed at stanching the budget deficit for the year through March 31, 2022.

Several media reports, also stated that the postponement of the LIC IPO could affect bond prices and would also have a negative impact on the rupee, which is reeling under pressure due to Russia’s invasion of Ukraine.