LIC’s Mega IPO Unlikely This Financial Year Amid The Volatile Market Situation

The chances of Life Insurance Corporation of India’s (LIC) initial public offer (IPO) hitting the market in the financial year 2021-22 are low. The government may delay the LIC’s mega IPO because of the Russian-Ukraine war.

The Centre has time until May 12 to launch the LIC IPO without filing fresh papers with markets regulator SEBI (Securities and Exchange Board of India). However, sources told NDTV that the listing is unlikely in early April because the financial markets have been affected because of the raging Russia-Ukraine conflict.

The geopolitical crisis has forced the government to rethink its decision to launch the IPO of  LIC. Earlier, the government planned to launch the IPO of LIC before the end of the current financial year. Now, the government wants to wait for the financial market to stabilize.

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The government had filed the draft red herring prospectus (DRHP) on February 13 for the IPO with SEBI, which granted its approval for the same last week. The DRHP had all the details of the financial results of LIC.

The government reportedly plans to sell about 31.6 crore shares or a 5 per cent stake in LIC. The sale is estimated to fetch around Rs 60,000 crore to the exchequer. Reportedly, at a 5 per cent stake dilution, the LIC IPO would be the biggest ever in the history of the Indian stock market.

LIC has reserved up to 35 per cent of its total IPO size for retail investors. Employees and policyholders of the insurance would get a discount over the floor price in the initial share sale. However, the Centre did not disclose the discount which will be given to policyholders and LIC employees.

Recently, Finance Minister Nirmala Sitharaman had said there is a lot of interest in the market for the upcoming IPO of LIC.