Government can postpone life insurance corporationThe mega initial public offering (IPO) for the next financial year, as the government is likely to hold a meeting to re-evaluate the IPO timing in view of the Russo-Ukraine war, sources told CNBC TV18.
A government official said that the government is holding a road show for the public offering. IPO of LIC It is considered to be the largest public offering by any Indian company, and is considered to be a globally tracked public listing.
A government official with knowledge of the development has said that the LIC listing review meeting will take place “this week”. A recent interview with The Hindu Business Line, where he suggested that the emerging global situation may lead to a re-think on IPO timing.
“Ideally, I want to go ahead with it because we had plans for it for some time based entirely on Indian ideas,” Sitharaman told the newspaper. I don’t want to see it again”.
LIC IPO: Effect of Delay
The conflict in Eastern Europe has affected global stock markets and international oil prices including BSE Sensex and NSE Nifty. Many experts have warned that Russia’s invasion of Ukraine could raise global inflation levels.
The review could affect the timing of the mega public offering, India’s largest, which has formed the largest part of the country’s asset-sales program aimed at bridging the budget deficit for the year by March 31, 2022.
Besides, the postponement of LIC IPO may impact bond prices and will also negatively impact the rupee, which is under pressure due to Russia’s invasion of Ukraine.
LIC IPO: What do analysts say?
Commenting on the possible delay in India’s mega IPO, Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services told News18.com: “The current weak global market environment is not the ideal setting for LIC-sized mega IPOs. Govt. Might postpone it till FY23. Delay is better than a flopping IPO.”
LIC IPO: Stage set for market debut
Last week, the Union Cabinet, chaired by Prime Minister Narendra Modi, allowed foreign direct investment (FDI) of up to 20 per cent under the automatic route in IPO-bound LIC with an aim to facilitate disinvestment of the country’s largest insurer.
Setting the stage for the country’s biggest ever public offering, Life Insurance Corporation on February 13 filed draft papers with capital markets regulator SEBI for sale of 5 per cent stake by the government for an estimated Rs 63,000 crore.
According to the draft Red Herring Prospectus (DRHP), the embedded value of LIC, which is a measure of the value of consolidated shareholders in an insurance company, has been pegged at around Rs 5.4 lakh crore by international actuarial firm Milliman as of September 30, 2021. Advisor.
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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