new Delhi. This news can disappoint people waiting for LIC’s IPO. It is heard that the central government is contemplating to bring the mega IPO of its largest insurance company in the middle of May. Although this news has not been officially confirmed.
Quoting a Bloomberg report, Moneycontrol has written that the government hopes that by then the situation of volatility in the market due to Russia’s attack on Ukraine will calm down. It has been written that the sources said, under the rules, the embedded value published by Life Insurance Corporation (LIC) for the IPO will be valid till May. He said that in case of delay beyond this, the embedded value of LIC will have to be re-calculated. Insurance companies are valued on the basis of embedded value.
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Russo-Ukraine war spoiled work
Earlier there were reports that this IPO is to be launched by the end of March. It is a key part of the Prime Minister Narendra Modi government’s plan to sell government assets to finance the growing budget deficit. According to a Bloomberg News report published earlier this month, the market sentiment had deteriorated due to the Russo-Ukraine war, forcing the country’s biggest IPO to be postponed to the next fiscal year. A finance ministry spokesperson did not comment on this.
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Volatility increased in February
Another source said that if the market volatility index for the launch of the government’s IPO is at 15, then it will be a comfortable level. The NSE volatility index was at 26 on Monday, which was much higher than last year’s average of 17.9. It had gone to the highest level of 31.98 on 24 February this financial year.
Significantly, the government has to raise about Rs 65,400 crore by selling 5 per cent stake in the insurance company. Finance Minister Nirmala Sitharaman first announced the IPO plan in February 2020, but it was postponed due to the pandemic.
Tags: IPO, LIC IPO, Life Insurance Corporation of India (LIC)
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