The much-awaited initial public offering of the country’s largest insurer LIC, scheduled to be conducted in late March 2022 could now be deferred to the next financial year, FY23.
Reports of the development state that due to the ongoing worsening war conditions between Russia and Ukraine, the government could hold a meeting to reassess the LIC IPO timing and launch.
LIC IPO Could Likely Be Deferred
The Russia-Ukraine crisis is only elevating, with Russia declaring war on Ukraine last week, followed by multiple sanctions imposed on the country by Western nations, leading to a surge in oil prices to over 7 year highs.
This was followed by further tightening of sanctions on Russia by Western nations over the weekend and the markets globally crashed in just the past 5 days’ time.
Amid the escalating geopolitical tensions in Eastern Europe, the much-awaited IPO of the state-owned LIC could very well defer to the upcoming financial year 2022-23.
According to a CNBC TV-18 report, sources informed that the government is likely to hold a meeting to reassess the IPO timing, amid the geopolitical unrest.
Moreover, in an interview with the Hindu Line recently, Finance Minister Nirmala Sitharaman has stated that if required, they might look up at the IPO timing for a postponement.
She said, “Ideally, I’d like to go ahead with it because we had planned it for some time based purely on Indian considerations. If global considerations warrant that I need to look at it, I wouldn’t mind looking at it again”.
She further added, “When a private sector promoter takes this call, he has to only explain this to the company’s board but I would have to explain it to the whole world”, she added while talking about delaying the IPO and how it would constrain the government’s annual disinvestment targets.
LIC IPO Details
LIC filed its draft red herring prospectus (DRHP) filed on February 13, and the offer for sale is up to 316.25 million shares or about 5% of its stake in the insurance company.
“The aggregate of reservations for eligible policyholder(s) shall not exceed 10% of the offer size”, noted LIC’s DRHP.
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