Government may review the timing of LIC IPO after Ukraine invasion: FM Sitharaman

Amid the ongoing conflict between Russia and Ukraine, people who are gearing up for the much-awaited initial public offering (IPO) of Life Insurance Corporation (LIC) will have to wait for some more time. The ongoing geopolitical situation may force the government to review the timing for the launch of the IPO, which is going to be the largest IPO to date, as per Union Finance Minister Nirmala Sitharaman.

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

The review could impact the timing of the mega public offering, India's largest, which made up the biggest portion of the country's $10.4 billion asset-sale programs aimed at stanching the budget deficit for the year through March 31, 2022.

"When a private sector promoter takes this call, he has to only explain this to the company's board," she said, when asked if a call about delaying the IPO could be constrained by the government's annual disinvestment targets. "But I would have to explain it to the whole world."

State-owned Life Insurance Corporation of India (LIC) has filed a Draft Red Herring Prospectus with SEBI, seeking approval for its Initial Public Offering (IPO) on February 13, 2022. The government had set a March deadline for the IPO. LIC has a 66 per cent market share in New Business Premiums with 283 million policies and 1.35 million agents as of March 31, 2021. The embedded value of LIC is around Rs 5.40 lakh crore.

The government has permitted up to 20 per cent Foreign Direct Investment (FDI) under automatic route in Life Insurance Corporation of India (LIC) intending to facilitate disinvestment of the country's largest insurer.

The much-awaited initial public offering, IPO of LIC was expected to hit the market in March and LIC's employees and policyholders would get a discount over the floor price.