The IPO of the state insurer Life Insurance Corporation of India (LIC), which is expected to launch in March, may be further delayed due to high market volatility due to geopolitical tensions, sources told News18.
Yesterday, however, Finance Minister Nirmala Sitharaman said the government will go ahead with the planned IPO of Life Insurance Corp of India (LIC), despite market volatilities due to geopolitical developments.
News18 has learned from its sources that the government is closely monitoring global developments due to the Ukraine-Russia tensions and the resulting market volitility.
The government plans to sell 5 percent of its stake in LIC for around Rs 65,000 crore in what is India’s largest issue, with the insurance giant valued at around Rs 13 lakh crore. LIC is likely to be listed on local markets before the end of March 2022.
The insurance giant has submitted a draft document for its share sale to the market regulator. The market expects approval soon and public bidding is likely to begin in mid-March. The government, which owns the entirety of the company, aims to complete the sale by the end of this fiscal year, despite unfavorable markets.
Furthermore, foreign investors have been bearish on India for some time now. In the current calendar year, they have withdrawn about Rs 52,500 crore from shares, data available on NSDL shows.
The government is rushing to complete the IPO by the end of March to meet its fiscal deficit target of 6.4 percent of gross domestic product (GDP) for 2021/22. problem.
New Delhi has sharply reduced its divestment and privatization plans for the fiscal year ending March 31 to Rs 78,000 crore from Rs 1.75 lakh crore. So far, it has raised only Rs 12,000 crore from divesting stakes in state-owned enterprises as it failed to privatize, including the run refinery Bharat Petroleum Corp Ltd and two banks.
Investor roadshows for the offering, which will be the world’s third-largest IPO at $8 billion, began earlier this week, Reuters reported.
SBI Caps, Citigroup, Nomura, JPMorgan, Goldman Sachs and five other domestic and international investment banks are bookrunning lead managers for the deal.
LIC’s impending offering has battered shares in other publicly traded Indian insurers as investors trim their holdings to make room for the state giant, fund managers and analysts said.
The 66-year-old company dominates the Indian insurance industry with more than 280 million policies. It was the world’s fifth largest insurer in terms of insurance premium collection in 2020, the last year for which statistics are available.
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