LIC’s employees union’s pressure against the government’s IPO plan
Life Insurance Corporation’s employees union has decided to mount pressure against the government’s initial public offering (IPO) plan, a day after the finance minister indicated that the Center has an open mind on the timing of the IPO launch due to the escalating crisis in Ukraine. .
After getting upbeat last week on LIC’s prospects despite deteriorating market conditions, Finance Minister Nirmala Sitharaman on Tuesday told the media that the government is ready to review IPO plans due to prevailing market conditions.
“I wouldn’t mind seeing it again,” Ms Sitharaman said in an interview with Business Line newspaper, referring to the timing of LIC’s offer. “Now, there is a full-scale war. So, I need to go back and review the situation.”
Meanwhile, All India Insurance Employees Association has decided today that LIC employees will hold a sit-in on March 5, 2022, at all the divisional headquarters of LIC in the county, against the government’s decision to bring the IPO.
This comes a day after a special Reuters report showed bankers advising LIC on its IPO asking the government to defer the launch of the stock offering in view of market shocks caused by Russia’s invasion of Ukraine. was introduced from two sources. Negotiation.
In India’s most prominent stock offering, the government plans to raise around $8 billion by selling a 5 per cent stake in LIC this month before the fiscal year ends on March 31. The offer is also significant as it will help New Delhi raise funds for the budget. Expenditure.
A sell-off in global markets following Russia’s invasion of Ukraine and subsequent Western sanctions has alerted companies to IPOs, with some putting their plans on hold. Chinese fashion retailer Sheen, GCP co-living REIT in London and German prosthesis maker Otobock have put their IPO plans on hold.
If LIC’s IPO is delayed, it will join the growing list of planned offerings, as the war wreaks havoc on investors’ appetite for riskier assets.
But two bankers familiar with the discussions said investment banks were putting pressure on the government over the deal and at a recent in-camera meeting expressed concern over the delay in the IPO, saying market conditions were volatile due to Russia-Ukraine tensions. was not favorable. According to a Reuters report.
Bankers have told the Indian government that it would make sense to launch LIC’s stock offering in the coming months when investors are more confident, a banker speaking directly to Reuters told Reuters.
“We have conveyed our concerns… a decision on the (revised) IPO time could come by this week,” the banker told Reuters.
Foreign investors are busy reworking their portfolios in view of market turmoil and do not have time to evaluate LIC prospectus; Another banking source told Reuters.