Sandeep Singh
The Securities and Exchange Board of India (SEBI) on Tuesday approved LIC’s initial public offer (IPO), paving the way for the government to launch the issue, through which it plans to raise around Rs 60,000 crore. Is. A source privy to the matter said, “Sebi approved the public issue of LIC late Tuesday evening and now the government has to decide when it wants to launch it.
Although regulatory approvals have come for the issue, experts say that the IPO may be postponed due to the political situation and its impact on equity markets and investor sentiment across the globe.
An investment banker on the condition of anonymity said, “Now the decision is in the hands of the government, however, I do not think it should be taken as a big public issue when the market is under pressure and investor sentiment has been hit.” This is the right time to come with LIC.” Earlier this month, Finance Minister Nirmala Sitharaman had said that she wants to go ahead with the LIC IPO, but she would not mind looking at it again, given the global outlook.
It is important to note that the benchmark Sensex has fallen over 6.5 per cent since February 24 since the Russian invasion of Ukraine. FPIs are also in an exit mode. While they have sold Indian equities worth Rs 30,141 crore in March alone, the net outflow from January 1, 2022 is now Rs 99,036 crore.
On March 1, The Indian Express reported that the Department of Investment and Public Asset Management (DIPAM) was keen to launch LIC’s initial public offering (IPO) in March 2022 to meet its revised disinvestment target for the current financial year. But some prominent officials in the regulatory sector opposed the move citing less number of policyholders having PAN linked to the policy and demat account holders.
The geopolitical developments in Russia-Ukraine and its impact on the markets, FPI outflows in the past few months, volatility in the markets and the month of March being not the right time for a major public issue are also major problems.