Indian bankers push govt to defer LIC IPO amid Russia-Ukraine crisis

  • Bankers advising Indian state-run Life Insurance Corp (LIC) on its IPO have pushed the government to defer the launch of the stock offering in the wake of the market jolt caused by Russia’s invasion of Ukraine, two sources familiar with the talks told Reuters.
  • In what will be the biggest stock offering in India, the government has plans to raise about USD8bn by selling 5% of LIC’s stake in Mar 22 before the end of FY22.
  • But two bankers familiar with discussions said the investment banks on the deal were piling pressure on the government and raised concerns in a recent closed-door meeting to delay the IPO by saying market conditions were no more conducive due to volatility caused by Russia-Ukraine tensions.
  • If the IPO is delayed, it will add to the growing list of planned offerings being put on hold as the war dampens investor appetite for risky assets.
  • The bankers have told the Indian government that launching LIC’s stock offering would make sense in the coming months when investors are more confident, said one of the bankers, who is directly involved in the negotiations.
  • “We have communicated our concerns… it is likely that a decision on (revised) IPO timing can come by this week,” said the banker.
  • Foreign investors have been busy re-working their portfolios given the market turmoil and have had no time to evaluate the LIC prospectus, the second banking source told Reuters.
  • After sounding upbeat last week on LIC’s prospects despite deteriorating market condition, India’s finance minister, Nirmala Sitharaman, told local media the government was open to reviewing the IPO plans due to prevalent market conditions.

External Link :