LIC IPO Date: When will LIC’s IPO come on D-Street? This is a question that has been on everyone’s mind for quite some time now. However, the government is expected to postpone LIC’s mega initial public offering (IPO) to the next financial year as the Russo-Ukraine war has dampened the interest of fund managers in the public issue, market experts said. Life Insurance Corporation of India (LIC) Mega IPO is one of the most awaited financial events.
LIC IPO: Investor interest matters
Department of Investment and Public Asset Management (DIPAM) secretary Tuhin Kanta Pandey said the government will take a decision on the IPO of the country’s largest insurance company LIC in the “best interest of investors”.
“There are some unforeseen events that have just come to an end. We are closely monitoring the market and of course whatever the government will do, we will do it in the interest of the investors and the IPO.
LIC IPO: Government on Time
Pandey said the government is guided by professional advisors and whatever decision will be taken will be in the best interest of investors and stakeholders. He further added that “LIC is not really a strategic investment but yes it is a very important event, because LIC is a very old organization for wide public ownership. This is also one of the important objectives of the government. In days, Railtel has brought many listings including IRCTC.
LIC IPO: Russia-Ukraine war to delay IPO?
However, following the Russian invasion of Ukraine, increasing market volatility and uncertainties may prompt the government to postpone the IPO to next year, suggest sources with knowledge of the matter.
“The current geopolitical issue between Russia and Ukraine continues to haunt the global equity markets. Indian markets too reacted negatively to this development and declined by almost 11 per cent from their all-time high. Thus, the current market volatility LIC is not conducive to IPO and the government may defer the issue to the next financial year,” said Arijit Malakar, head of retail equity research, Ashika Group.
LIC IPO: A volatile market scenario, what to do with IPO?
In a situation where the market is highly volatile, investors avoid making fresh investments. Piyush Nagda, Head of Investment Products, Prabhudas Lilladher said: “Investors are seeing huge mark-to-market losses in their portfolios and are currently less excited for LIC IPOs. Has signaled a postponement because the Russo-Ukraine war could be protracted and its adverse effects are already visible on fuel and commodity prices.
Finance Minister Nirmala Sitharaman had also indicated a review of the IPO in view of the evolving geopolitical situation.
LIC IPO: Important March Timeline?
The government was hoping to raise Rs 63,000 crore by selling 5 per cent stake in the life insurance firm to meet its disinvestment target of Rs 78,000 crore in the current fiscal. If the initial public offering (IPO) is postponed to the next financial year, the government will miss the revised disinvestment target by a huge margin. So far this fiscal, the government has raised Rs 12,030 crore through disinvestment of CPSEs and strategic sale of Air India. The government had earlier projected to raise Rs 1.75 lakh from disinvestment during 2021-22.
LIC IPO: About IPO
LIC’s IPO is purely an offer-for-sale (OFS) by the Government of India and there is no fresh issue of shares by LIC. The government has 100 percent stake or more than 632.49 crore shares in LIC. The face value of the shares is Rs 10 per share.
LIC Public Issue will be the biggest IPO in the history of Indian stock market. Once listed, LIC’s market valuation will be at par with top companies like RIL and TCS.
So far, the amount raised from Paytm’s IPO in 2021 was the largest at Rs 18,300 crore, followed by Coal India (2010) at around Rs 15,500 crore and Reliance Power (2008) at Rs 11,700 crore.
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