‘If global consideration allows me to look at it (LIC IPO), I will have no problem looking at it again,’ says FM.
Banks who advised Indian State-run Life Insurance Corp (LIC) on their IPO have forced the government to postpone the launch of stocks due to market volatility caused by the Russian invasion of Ukraine, two sources close to the talks told Reuters.
In what is to be the largest stock exchange in India, the government plans to raise about $ 8 billion by selling 5% of the LIC stake this month before the financial year ends March 31. to increase the spending budget.
But two negotiating banks said the investment banks in the agreement were putting pressure on the government and raised concerns at a recently closed meeting to delay the IPO from market conditions due to volatility caused by Russia-Ukraine tensions.
If the IPO is delayed, it will add to the growing list of fixed contributions as the war destroys investors’ interest in risky assets.
Bankers have told the Indian government that introducing LIC stocks would make sense in the coming months when investors are more confident, said one banker, who has been directly involved in the negotiations.
“We have conveyed our concerns, possible that a decision on the (revised) IPO period could come this week,” he said.
The Indian Treasury and the LIC did not immediately respond to requests for comment.
Last month, the government and senior LIC officials launched a series of street demonstrations to spark interest in-stock supply. Still, the Russia-Ukraine crisis has now begun to take its toll.
Foreign investors have been busy redefining their portfolios due to market turmoil and do not have time to review the LIC prospectus, and a second bank source told Reuters.
After commenting last week on LIC prospects despite the deteriorating market situation, Indian Finance Minister Nirmala Sitharaman told local media that the government was open to reviewing IPO plans due to widespread market conditions.
“I wouldn’t have a problem looking at it again,” Sitharaman said in an interview with Business Line, referring to LIC funding.
“Now, there is a difficult battle. Therefore, I need to go back and review the situation.”
The review is likely to significantly impact India’s largest public sector, the largest in India, which has built a substantial part of the country’s $ 10.4 billion real estate program aimed at eliminating the annual budget deficit by March 31 2022.
“If a private sector facilitator picks up the phone, he or she should only report to the company board,” he said when asked if the government’s annual spending policy could block the IPO delay call. “But I have to explain it to the whole world.”
Published by – Bharat Anand
Editor- Subbuthai Padma
