Due to deepening Russia-Ukraine crisis, suspense has increased on the launch of mega IPO of Life Insurance Corporation of India (LIC). News agency PTI quoted sources as saying that the government may postpone the IPO for some time and wait for an opportune time to get the maximum value of its stake. It is believed that LIC’s IPO may be launched in the next financial year. This means to say that the launch of LIC IPO can happen after March.
A government source said on Wednesday, “The Russia-Ukraine dispute has now turned into a full-blown war, so we will have to assess the situation to proceed with LIC’s IPO.”
Nirmala Sitharaman had also given indications: Let us tell you that Finance Minister Nirmala Sitharaman had also indicated to review the IPO of LIC in view of the emerging geo-political situation. Sitharaman had said in an interview to ‘Hindu Business Line’, “Ideally, I would like to go ahead in this direction because we had planned it on the basis of purely Indian thinking. But if global circumstances are forcing this to be reconsidered, I would have no problem taking a fresh look at it.”
Expected to launch in March: The issue of LIC, which is being said to be the biggest IPO of the country so far, was expected to hit the market this month. LIC had on February 13 submitted the draft IPO before the capital markets regulator SEBI.
Failure again on disinvestment target: The government was hoping to raise Rs 63,000 crore by selling its five per cent stake in this life insurance company to meet the disinvestment target of Rs 78,000 crore in the current financial year.
If LIC’s IPO is postponed to the next financial year, the government will not be able to meet the revised disinvestment target by a huge margin. So far this fiscal, the government has raised Rs 12,030 crore through disinvestment of central PSUs and strategic sale of Air India.