LIC IPO may get postponed as the government may review the timing due to Russia-Ukraine uncertainty
LIC IPOis expected to be launched within the end of March, 2022.
- However, the government may take another look at the timing of the IPO amid market rout due to war between Russia and Ukraine.
- While this may be good news for investors, it is bad news for the government that is putting all efforts to get done with the IPO and get closer to the fiscal deficit target.
AdvertisementThe government may postpone Life Insurance Corporation’s initial public offering (IPO) that is expected to come out in March and fill in the gap for the fiscal deficit target.
Finance Minister Nirmala Sitharaman said in an interview to Business Line that they may take another look at the timing of the LIC IPO amid huge rout in the equity market and at the battlefield between Russia and Ukraine.
“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 the interview. “But if global considerations warrant that I need to look at it, I wouldn’t mind looking at it again," she said.
If the government chooses to review the timing, it means they could delay the IPO till the global risks that have blown off the market settle down. This may be good news for investors who were worried about their lowering profits that could be impacted by poor market conditions. However, it is bad news for the government that is putting all efforts to get done with the IPO and get closer to the fiscal deficit target.
It is also true that many investors were eagerly waiting to get their hands on a piece of India’s largest life insurance company, which would be the country's biggest IPO.
More than that, the IPO is special for the 29 crore policyholders of the life insurer, who would be getting a preference on the shares.
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