LIC IPO delay? Govt in wait-and-watch mode amid Russia-Ukraine crisis

The Centre will wait and watch the developments impacting stock markets on the back of a Russia-Ukraine offensive before taking a call on deferring the initial public offering (IPO) of Life Insurance Corporation (LIC) of India.

Until now, there is no discussion on delaying LIC's listing. The government is continuing with its roadshows for the public offering, informed a government official. 

The IPO of LIC is considered to be the largest public offering by any Indian company, and is touted to be a globally eyed public listing. The launch of military operations by Russia in Ukraine spooked markets on Thursday, with benchmark indices - the Nifty50 and the Sensex - tanking nearly 5 per cent apiece.

The government will closely monitor the Ukrainian crisis before taking any decision, the official added. Once the draft red herring prospectus is approved by the Securities and Exchange Board of India, the government will consult merchant bankers on an appropriate time for the IPO - likely to be in the second week of March.

War shadow looms

• Govt to continue with investor roadshows
• To watch out for developments arising from Russia-Ukraine war
• To consult merchant bankers on timing of LIC IPO once Sebi approves DRHP
• It is looking to sell 5% stake, or 316 million shares, in LIC

Concurrently, the Department of Investment and Public Asset Management (DIPAM)-appointed intermediaries will continue their investor outreach. The government is intending to approach 180 investors, including marquee names that have never participated in any Indian IPO until now.

Four teams have been created, which have the LIC chairman and managing director, along with officials from DIPAM and the Department of Financial Services, participating in roadshows.

The Centre is looking to approach Qatar Investment Authority, US-based Sands Capital, Citadel, Surveyor Capital, Marshall Wace, Oaktree Capital, Temasek Holdings, Abu Dhabi Investment Authority, and Canada Pension Plan Investment Board, among others.

The Centre is also looking to sell its 5 per cent, or 316 million shares, in LIC in the IPO that’s considered to be one of the biggest offers globally. The embedded value (EV) of the insurer has been estimated at Rs 5.39 trillion, and the government will finalise the valuation of LIC (a multiple of EV) after consultations with investors.