INSUBCONTINENT EXCLUSIVE:
Government's desire is for LIC's IPO this fiscal year, but is in reviewThe government will decide on the Life Insurance Corporation's (LICs)
Initial Public Offering (IPO) in the "best interest of the investors", a senior official said on Friday, on the heels of the finance
minister who indicated the centre was open to reviewing the plans because of the escalation in the Ukraine crisis.Tuhin Kanta Pandey,
Secretary of Department of Investment and Public Asset Management (DIPAM), said that while the government desires to come out with the IPO
of the state-owned life insurer in the current fiscal, it is a "dynamic situation".Meanwhile, the LIC's employees union has decided to step
up pressure against the government's IPO Plan. That came a day after an exclusive report by Reuters, which showed bankers advising LIC on
its IPO had pushed the government to defer the launch of the stock offering in the wake of the market jolt caused by Russia's invasion of
Ukraine, according to two sources familiar with the talks.After sounding upbeat last week on LIC's prospects despite the deteriorating
market condition, finance minister Nirmala Sitharaman told the media on Tuesday the centre has an open mind on the timing of the IPO launch
due to prevailing market conditions."I wouldn't mind looking at it again," Ms Sitharaman said in an interview with Business Line newspaper,
referring to the timing of the LIC offering
"Now, there is a full-scale war
Therefore, I need to go back and review the situation."In India's most prominent stock offering, the government has plans to raise about $8
billion by selling 5 per cent of LIC's stake this month before the fiscal year ends on March 31
The offering is also critical as it will help New Delhi raise funds for budgeted spending.However, in the wake of the market volatility due
to the Ukraine-Russia war, there might be a rethink on the timing of the LIC share sale."There are certain unanticipated events which have
We are closely watching the market, and certainly, whatever the government will do, we will do in the best interest of the investors and
also the IPO," said the secretary of DIPAM.Speaking at the seventh National Conference on Economics of Competition Law, 2022, he also said
the government's desire to develop the state-owned insurer's IPO this fiscal year itself.The financial year is ending on March 31."That is
always our desire, but now with this crisis which has come up, it is also a very dynamic situation
We are closely watching (the situation), and since you know you are dealing with the market all the time, so we have to be watchful and make
our strategy accordingly," Mr Pandey stressed.He said professional advisors guide the government, and whatever decision is taken, it will be
in the best interest of the investors and the stakeholders."LIC is not really any strategic investment, but yes, it is a very important
event, as LIC being a very old organisation to wider public ownership
This is also one of the important objectives of the government
We have brought in several listings in the recent past like Railtel, IRCTC, among others," said the secretary of DIPAM.He also said that one
crore new Demat accounts have been opened because of the LIC IPO proposal."LIC alone has brought in something like one crore new demat
(dematerialised) accounts
Now the Demat accounts have gone up to more than 8 crores, and a tremendous amount of new energy has also come in terms of retail
investors," he added.A selloff in global markets following Russia's invasion of Ukraine and subsequent Western sanctions has made companies
cautious about IPOs, with some putting their plans on hold
Chinese fashion retailer Shein, GCP Co-Living REIT in London and German artificial limb maker Ottobock have put their IPO plans on hold. If
the LIC IPO is delayed, it will add to the growing list of planned offerings being put on hold as the war dampens investor appetite for
