New Delhi: Mega Initial Public Offering (IPO) of Life Insurance Corporation (IPO)LICIndia’s next financial year is likely to be delayed amid volatility in the market due to Russia’s invasion of Ukraine, said people with knowledge of the matter.
Bankers and officials are preparing to transfer the list of the state-run insurer after the current fiscal year, which ends in March, the people said, asking not to be identified as the matter is not public.
A formal announcement can be expected this week or next week, he said, adding that the sale could happen as soon as April if market volatility eases.
According to people, LIC’s underwriters have noticed tacit interest during initial meetings with potential anchor investors. People said many fund managers have been wary of making big commitments in the midst of market volatility.
A finance ministry spokesperson did not immediately respond to calls on his mobile phone. LIC declined to comment.
LIC’s IPO will be the biggest to be hit by the war, which has wiped out 6% of BP Plc’s market value and over $3 trillion of global market capitalization since tensions escalated since February 18. Prime Minister Narendra Modi had sought to raise as much as $8.7 billion from the deal, Bloomberg previously reported, cash that is key to bridging the gap in the budget deficit for the year through March 31.
Finance Minister Nirmala Sitharaman said this week that she “wouldn’t mind” taking another look at the timing of LIC’s offer, though ideally she would like to go ahead with it. People said that even though it does not pursue the share sale on the original timeline, the government is still hoping to complete the IPO in the next few months.
The deferment would be another blow to India, which has largely lowered its asset sale target after delays in privatization of other state-run companies including Bharat Petroleum Corp Ltd. PM Modi’s administration had expected the shortfall to be 6.9% of the gross. With Domestic Product (GDP) LIC IPO accounting for approximately 3% of revenue.
The government had also set record market borrowings for the financial year beginning April 1.
India had offered to sell a 5% stake, or about 316 million shares, in the insurer, seen as India’s Aramco moment. Like the $29.4 billion listing of the Gulf oil giant, the world’s largest, the launch of LIC will test the depth of the country’s capital market and the global appetite for the state-owned entity.
Bankers and officials are preparing to transfer the list of the state-run insurer after the current fiscal year, which ends in March, the people said, asking not to be identified as the matter is not public.
A formal announcement can be expected this week or next week, he said, adding that the sale could happen as soon as April if market volatility eases.
According to people, LIC’s underwriters have noticed tacit interest during initial meetings with potential anchor investors. People said many fund managers have been wary of making big commitments in the midst of market volatility.
A finance ministry spokesperson did not immediately respond to calls on his mobile phone. LIC declined to comment.
LIC’s IPO will be the biggest to be hit by the war, which has wiped out 6% of BP Plc’s market value and over $3 trillion of global market capitalization since tensions escalated since February 18. Prime Minister Narendra Modi had sought to raise as much as $8.7 billion from the deal, Bloomberg previously reported, cash that is key to bridging the gap in the budget deficit for the year through March 31.
Finance Minister Nirmala Sitharaman said this week that she “wouldn’t mind” taking another look at the timing of LIC’s offer, though ideally she would like to go ahead with it. People said that even though it does not pursue the share sale on the original timeline, the government is still hoping to complete the IPO in the next few months.
The deferment would be another blow to India, which has largely lowered its asset sale target after delays in privatization of other state-run companies including Bharat Petroleum Corp Ltd. PM Modi’s administration had expected the shortfall to be 6.9% of the gross. With Domestic Product (GDP) LIC IPO accounting for approximately 3% of revenue.
The government had also set record market borrowings for the financial year beginning April 1.
India had offered to sell a 5% stake, or about 316 million shares, in the insurer, seen as India’s Aramco moment. Like the $29.4 billion listing of the Gulf oil giant, the world’s largest, the launch of LIC will test the depth of the country’s capital market and the global appetite for the state-owned entity.