Govt may review timing of LIC IPO amid Ukraine crisis: FM Sitharaman

'If global considerations warrant that I need to look at it (LIC IPO), I wouldn't mind looking at it again,' says FM

India may take another look at the timing of Life Insurance Corp. of India’s initial share sale, the state-owned insurer, following Russia’s invasion of Ukraine, Finance Minister Nirmala Sitharaman said 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.

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 program aimed at stanching the budget deficit for the year through March 31, 2022. The government had set a March deadline for the IPO and its IPO document filed on Feb. 13 put the insurance giant’s embedded value at Rs 5.4 trillion.

“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.”

The government and LIC's management had launched virtual roadshows for India's biggest-ever public listing, aiming to float a stake of 5% to raise about $8 billion this month.

Last Saturday, the Union Cabinet approved a policy amendment allowing foreign direct investment of up to 20% in LIC a change aimed at facilitating the listing of the state-run insurer.

Since Russia's invasion of Ukraine last week, Indian markets have faced volatility like other markets, and government officials fear foreign and domestic investors may shy away from buying shares of the insurance company.

Sitharaman said the government ideally hoped to proceed with the listing as planned.

She added that the pressure of meeting the revenue targets from the sale of government stakes in companies in the current fiscal year ending March 31 would not be factor for deciding the timing of LIC listing.