Decision on LIC IPO timing expected shortly

A decision on the timeline for the maiden public offer of the Life Insurance Corporation of India (LIC) is likely to be taken shortly after internal consultations between Finance Ministry officials, advisors to the issue and company executives.

With less than three weeks left for the current financial year to end, all available indications point towards the mega-IPO hitting the markets in the first quarter beginning April, although a final decision on the timing is yet to be taken.

The government would like the market situation to stabilise and a full-fledged publicity campaign to be restarted to gain investors for an issue that will be the largest so far in India’s capital markets history.

“We are constantly watching the markets”, a Finance Ministry official told Business Today TV.

Over the past few days, there has been a noticeable pause in the public relations campaign for the proposed IPO, with planned media interactions shelved amidst a deluge of news from the ongoing Ukraine conflict and state assembly elections in five states.

With the elections done and dusted in favour of the ruling Bhartiya Janata Party (BJP) government, the stock markets have risen over 5 per cent this week. Markets had gone into a freefall from February 23 when Russia invaded Ukraine. By March 7, the Sensex had fallen 7.7 per cent. That evening the exit poll data came and the morning after investors sent the Sensex and Nifty charging back up.

The market regulator, Securities and Exchange Board of India (SEBI), has given an initial approval to the draft red herring prospectus (DRHP) of LIC. The details of this initial approval will be made public on the SEBI website this coming Monday.

The issuer will now begin the process of finalising the prospectus, including the valuation details and the issue price.

The government had set a March deadline for the IPO. Earlier this month, Finance Minister Nirmala Sitharaman had said that while she would like to go ahead with the LIC IPO as planned, she wouldn’t mind relooking it given the global situation.

LIC, which was formed six decades ago when India's insurance sector was nationalised, is the largest insurance company in India, with over 280 million policies and a dominant 60 per cent plus market share.