Amid Russia-Ukraine Crisis Government To Review LIC IPO Launch Timing

The unrest in Eastern Europe has influenced global stock markets, including the BSE Sensex and the NSE Nifty, as well as worldwide oil prices. Several academics have warned that worldwide inflation may rise as a result of Russia's invasion of Ukraine. Life Insurance Corporation (LIC) of India's initial public offering (IPO) is not untouched by this conflict.

Since the announcement of LIC IPO, there has been increased interest in the offering not just among brokers and investors, but also among policyholders. Because LIC is India's largest insurance firm, ordinary investors are waiting until March to invest in the largest Indian IPO.

Following unrest and Russia's invasion of Ukraine, the Government of India may reconsider the date of LIC IPO, according to Finance Minister Nirmala Sitharaman in an interview.

"Ideally, I'd like to go ahead with it because we'd planned it for some time based purely on Indian considerations," Sitharaman said in an interview with Business Line newspaper. "But if global considerations warrant that I need to look at it, I wouldn't mind looking at it again," she said.

Until March 02, all signs were that the LIC IPO would go ahead as planned. Even after the Russian invasion last week, LIC and the DIMPAM (Department of Investment and Public Asset Management) continued to perform roadshows.

The assessment might influence the timing of India's largest public offering, which made up the majority of the country's $10.4 billion asset-sale programs targeted at reducing the fiscal deficit for the fiscal year ending March 31, 2022. The government had set a March deadline for the IPO, and its IPO prospectus, submitted on Feb. 13, placed the insurance giant's embedded value at Rs 5.4 trillion.

FDI in LIC IPO

The Union Cabinet chaired by PM Narendra Modi permitted up to 20 percent foreign direct investment (FDI) under automatic route in IPO-bound LIC to facilitate disinvestment of the country's largest insurer. The current war happening in eiurope and the LIC IPO timing might influence the proposes this 20 Percent FDI.
Setting the stage for the country's biggest-ever public offering, Life Insurance Corporation on February 13 filed draft papers with capital market regulator Sebi for the sale of a 5 percent stake by the government for an estimated Rs 63,000 crore.