This year was a treat for companies as many private companies like Nykaa, Zomato launched their Initial Public Offerings. Some were a huge success while some could not sustain what they initially promised. Life Insurance Corporation is India’s leading Insurance Company that is owned by state and LIC IPO was to be launched this year.
LIC, a public sector undertaking was planning to launch IPO by the end of financial year 2021-22. The embedded value of the company is estimated to be more than 4 lakh crore and market value would be four times of the embedded value. This made this IPO one of the biggest launches of the year and retail investors were excited for the launch.
The mega launch of LIC IPO is expected to be delayed into financial year 2022-23 because of instability in the market due to Russia Ukraine conflict. Officials are working to prepare the documents and listing to next fiscal year which starts after March, 2022 as reported by TOI.
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The company might make an official announcement by next week and if the volatility in the market will decrease in April we can expect the IPO to launch in April, 2022. In early meetings, potential anchor investors have given a muted response. Big fund managers have also been keeping quiet because of their growing concern regarding volatility of the market.
LIC IPO has had a bad hit by the ongoing Russia Ukraine conflicts. The conflict has wiped 6% of BP Plc’s market value and over 3 trillion dollar of global market capitalization since the tension started escalating on February 18. Central government has been planning to raise more than 8.7 billion dollars as per Bloomberg report. This cash was important to fill the budget deficit gap in FY 2021-22 that will end on March 31.
Government was planning to sell 5% stake through 316 million shares in LIC. Such huge numbers were seen as Aramco moment for India. This would test the depth of India’s capital market and its appetite.
