India’s state-owned Life Insurance Corporation of India (LIC) mega Initial Public Offering (IPO) will be delayed to the fiscal year 2022-23. An official announcement will be made in the coming days, the Times of India (TOI) reports.
“Bankers and officials are preparing to shift the listing of the state-owned insurer to after the current fiscal year which ends in March,” TOI report further said.
The reason behind the delay is the ongoing crisis in Russia which has sent the global markets in red amid soaring prices of crude and food as well as worries about inflation.
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Numerous fund managers are wary of committing money in such a volatile market and there has been low noise from potential anchor investors as well, the TOI report further says.
This delay is a setback to the government’s divestment plans via which it planned to raise around USD9 billion before the fiscal year 2021-22 ended. This will impact the budget deficit.
Finance Minister Nirmala Sitharaman also said this week that the government will have no issues in delaying the IPO.
During the recently announced Budget for 2022-23FY, Minister Sitharaman had announced a revised estimate of the fiscal deficit, increasing at 6.9 percent of the GDP.
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This comes a month after the government said that it will not rush to sell 53 percent stake in the state-run Bharat Petroleum as it failed to attract competitive bids.
Life Insurance Corporation of India (LIC) IPO is expected to be the biggest ever in Indian history.
The sale of 5 percent stake is expected to collect anywhere between INR30,000 crore to INR60,000 crore. That will be considerably higher than the size of Paytm IPO (Rs 18,300 crore) or Coal India IPO (Rs 15,200 crore).
With 61 percent share of the new premium collected and over 72 percent share in the insurance policies sold in India while commanding assets worth INR 39.7 trillion, the IPO is expected to set records vis-à-vis retail subscription and the money invested by going public.
