Russia-Ukraine Conflict Will Impact LIC IPO Launch? Geo-Political Situation Being Monitored..

On Monday LIC chairman M R Kumar said that though the insurance behemoth is keen on listing of the IPO in March, it is watching the geo-political situation carefully as there is volatility in stock markets generated by tension between Russia and the US over Ukraine.

For its initial public offering (IPO), Life Insurance Corporation (LIC) has already filed the DRHP with the Securities and Exchange Board of India (SEBI).

Geopolitical Situation Being Monitored

When asked about the impact of the evolving geopolitical situation on the upcoming IPO, Kumar said that “We are watching the situation closely and carefully…but we are very keen on having listing in March”.

This would be the biggest ever IPO, wherein LIC intends to raise Rs 63,000 crore by selling 5 per cent government stake through offer for sale (OFS).

A Total Foreign Capital Outflow of Rs 18,856 crore

Amid the amid geopolitical tensions between Russia and NATO over Ukraine and chances of a rate hike by the US Federal Reserve, there has been foreign capital outflow from India wherein the foreign portfolio investors (FPIs) have withdrawn a net Rs 18,856 crore from the Indian markets in February.

Between the period of February 1-18, overseas investors took out Rs 15,342 crore from equities and Rs 3,629 crore from the bonds market as per the depositories data. At the same time, an amount of Rs 115 crore was invested in hybrid instruments which takes the net outflow to Rs 18,856 crore during the period under review and also marks it as the fifth consecutive month of foreign fund outflows.

Once LIC is listed in the stock market, the market valuation of LIC would be comparable to top companies like RIL and TCS. LIC public issue would be one of the biggest IPO in the history of Indian stock market.

The LIC IPO is expected in March and the revenue will be significant to meet the revised target of spending Rs 78,000 crore on the current budget.

The LIC budget was increased from Rs 100 crore to Rs 6,325 crore in September last year to help deliver the IPO. Last month, the LIC reported profits after tax of Rs 1,437 crore in the first half of the 2021-22 financial year compared to Rs 6.14 crore in the past.