LIC IPO would be merely a large domestic offering for domestic investors

The Ukraine war dynamics have made foreign investors skittish and they now see currency risks and anticipate embargoes while considering to invest in emerging markets. The US Federal Reserve’s hawkish stance has further made them choose a safe haven, an official said. However, most of these investors have assured the Centre that they would consider investing in the insurer’s future offerings, evaluating LIC’s performance as a listed entity, the official added.

Therefore, the government has decided to go ahead with the IPO even without them, as the response from domestic investors and some foreign investors has been impressive. Even after the flight of foreign capital from the Indian equity markets, the markets have stayed relatively strong on the back of buying by domestic investors. Based on this, the government has cut the issue size of the IPO to around Rs 21,000 crore considering the absorptive capacity of investors for such an offering, the official said.

Now, the IPO — earlier touted to be India’s Saudi Aramco moment — would be a large domestic offering for domestic investors.