LIC IPO Likely To Be Deferred To Next Fiscal Year Amid Market Volatility, Says Report

The public listing of the LIC could be shifted to next financial year, which begins in April, as bankers and other officials have begun preparation for the process

The central government had sought to raise about Rs 65,400 crore from the LIC IPO by diluting 5 per cent stake. Image: Getty

New Delhi: The mega initial public offering (IPO) of Life Insurance Corporation of India (LIC) is set to be deferred into the next fiscal year amid market swings led by Russia-Ukraine conflict, quoting sources Bloomberg reported on Friday.

The public listing of the LIC could be shifted to next financial year, which begins in April, as bankers and other officials have begun preparation for the process.

An official announcement could be expected this week or next. Sources have told Bloomberg that the sale may happen as soon as April if market volatility eases.

On March 1, Finance Minister Nirmala Sitharaman in an event said, “Ideally, I’d like to go ahead with it because we’d planned it for some time based purely on Indian considerations.”

“But if global considerations warrant that I need to look at it, I wouldn’t mind looking at it again,” she added.

According to reports, LIC’s underwriters have seen muted interest during early meetings with potential anchor investors. Many fund managers have been wary of making major commitments amid the market volatility.

A finance ministry spokesman didn’t immediately respond to a call on his mobile phone and LIC declined to comment.

The Centre had offered to sell a 5 per cent stake (about 31.6 crore shares) in the insurer. LIC’s debut would test the depth of India’s capital markets and global appetite for the state-owned entity.

The IPO of the state-run insurer will be the biggest to be impacted by the war, which has wiped out 6 per cent of BP Plc’s market value and over $3 trillion of global market capitalisation since tensions started rising from February 18.

The central government had sought to raise about Rs 65,400 crore from the deal; the cash that is crucial to plug a gap in the Budget deficit for the year through March 31.

The deferment could be another setback for the government, which has massively scaled down its asset sale target after the delay in privatisation of other state-run companies, including Bharat Petroleum Corporation.