Finance Minister Nirmala Sitharaman stressed on Tuesday that the government is going ahead with Life Insurance Corporation (LIC)’s first public offer (IPO) because “there is a buzz in the market and interest”.
At the same time, she cautiously said the government is concerned about whether “the market situation is conducive (for)”.
“There is a buzz in the market and there is interest in LIC’s IPO. We are going ahead with it,” said Ms. Sitharaman. However, she added that “we are equally concerned if the market situation is favourable”.
The finance minister made these remarks during a press conference in Mumbai on the last day of her two-day visit to the city, today.
Ms Sitharaman’s comments came against the background of rising tensions between Russia and Ukraine. The prevailing situation in Eastern Europe has had a negative impact on markets around the world. Oil prices have risen sharply, surpassing $99 a barrel earlier in the day.
The draft red-herring prospectus (DRHP) for LIC’s IPO was released on February 13. The offer concerns the sale of up to 316.25 million shares or approximately 5 percent held by the government in LIC.
The finance minister said the release of the DRHP has fueled interest in the IPO.
“I think the way it was made has sparked a lot of interest,” she added.
Ms Sitharaman had met with industry, trade and financial market stakeholders on the first day of her visit to Mumbai to discuss the union budget.
Reuters had previously reported that potential investors in LIC’s IPO are demanding assurances from company management that it will not sacrifice their interests to achieve the goals set forth by the government, its controlling shareholder.
In virtual roadshows for India’s largest IPO ever, LIC management and IPO bankers have been peppered with questions about the insurer’s past investments and their quality, four knowledgeable people said, the Reuters report said.
Potential conflicts of interest are at the heart of the IPO roadshows that began last week and are expected to last through the end of the month, Reuters said, citing sources.