LIC IPO may be delayed to next fiscal year amid market swings: Report


Published On: Friday, March 4, 2022 | By:

LIC IPO may be delayed to next fiscal year amid market swings: Report

The IPO of LIC of India is set to be delayed into the next financial year amid market swings triggered by the Russia-Ukraine crisis, according to some sources. Bankers and officials are preparing to shift the listing of the state-run insurer to after the current fiscal year, which ends in March, as per the source. A formal announcement could be expected this week or next, they added. LIC’s underwriters have seen muted interest during early meetings with potential anchor investors, according to the people. Many fund managers have been wary of making major commitments amid the market volatility, the people said.

LIC’s IPO will be the biggest to be impacted by the war, which has wiped out 6% of BP Plc’s market value and over $3 trillion of global market capitalization since tensions started rising from Feb. 18. Indian Prime Minister Narendra Modi had sought to raise as much as 654 billion rupees ($8.7 billion) from the deal, Bloomberg reported earlier, cash that is crucial to plug a gap in the budget deficit for the year through March 31.

India Finance Minister Nirmala Sitharaman said this week she “wouldn’t mind” taking another look at the timing of the LIC offering, though ideally she’d like to go ahead with it. Even if it doesn’t pursue the share sale on the original timeline, the government is still hoping to complete the IPO in the next few months, the people said.

The deferment will be another setback for India, which has massively scaled down its asset sale target after the delay in privatization of other state-run companies, including Bharat Petroleum Corp Ltd.The government had also penciled in a record market borrowing for the financial year starting April 1.

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