India central bank hints on possible delay of $8b LIC IPO

Several current events may have factored in on the delay.

The Reserve Bank of India may have hinted that the initial public offering for the Life Insurance Corporation of India may be delayed in its recent March 2022 Bulletin.

According to the central bank, because the LIC IPO is set to be the biggest in India, it is crucial that the IPO itself has a correct timing.

“With 35% of the issue size reserved for retail investors, their response is critical for the success of the LIC IPO,” RBI said.

RBI added that LIC’s huge policyholder base has the potential to bring a large number of new investors to the capital markets who have historically relied on traditional saving products.

“The deepening of capital markets is also vital for divestment plans of the government, and therefore, it is important to inculcate investors’ trust in key market infrastructure institutions,” RBI said.

The IPO was initially scheduled for the second week of March however, factors such as the Russia-Ukraine crisis, severe market conditions as well as the US Federal Reserve’s decision to hike interest for the first time in four years may have an impact on the timing of the IPO.

Recent media reports have indicated that the IPO may be moved to April, when the new financial year begins.