new Delhi : The finance ministry will review Life Insurance Corporation’s timing of India’s massive initial public offering earlier this week as geopolitical uncertainties triggered by the Russian invasion of Ukraine have dented investor sentiment around the world, two senior officials said. Talking about development.
A decision is likely to be taken by the end of the week on whether LIC’s IPO, India’s biggest IPO ever, should be launched this financial year, said one of the officials cited above, requesting anonymity. said.
War in Ukraine, rising energy prices and the prospect of a return to geopolitical rivalries such as the Cold War have scared investors, leading to a sell-off across asset classes and delaying fund-raising plans globally. The Department of Investment and Public Asset Management (DIPAM), one of the nodal bodies involved in the IPO, has been holding a roadshow with global investors for the past two weeks, as the government on February 13 filed draft IPO papers for the approval of the markets regulator. did.
The official said the roadshow is going well with new investors in sovereign wealth funds, alternative investment funds, pension funds, mutual funds and markets including the US, UK, Canada, Australia and Japan.
The government aims to sell 5% of its stake in the country’s largest insurer through an offer for sale (OFS) by the end of March, aiming to achieve maximum 75,000 crores.
Last week, the Union Cabinet approved foreign direct investment of up to 20% under the automatic route in LIC to facilitate foreign investment in the insurer.
Sale of LIC shares by March-end holds key for government to meet lowered disinvestment target 78,000 crore for the current financial year. The government initially budgeted 1.75 trillion from asset sales.
Finance Minister Nirmala Sitharaman said in an interview with The Hindu Business Line newspaper earlier this week that the government could look at the timing of the initial share sale after the war between Russia and Ukraine.
“Ideally, I would like to go ahead with it because it is something that we have planned for some time to be based purely on Indian ideas. But now, if I need to look at it for global reasons, I won’t mind watching it again.” He further added that the disinvestment target was not a deterrent factor for the government.
Questions emailed to the Finance Ministry spokesperson on Wednesday remained unanswered till press time.
Mint reported last month that the government is seeking a valuation of at least Based on 15 trillion for LIC 5.39 trillion embedded value extracted by actuarial firm Milliman Advisors. Investment bankers advising the government on the share sale have said that the money raised will depend on the appetite of the investors.
A total of 10 investment bankers including Goldman Sachs (India) Securities Pvt. Ltd., Citigroup Global Markets India Pvt. Ltd. and Nomura Financial Advisory & Securities (India) Pvt. Ltd. has been appointed to manage the LIC share sale.
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