Although the Department of Investment and Public Assets Management (DIPAM) was informed that it is eager to launch the LIC IPO in March 2022 to meet its revised divestment target for the current financial year, some key representatives of the regulator have opposed the move, citing the policy holding The percentage of people linking PAN to their policy is low, and the number of Demat accounts is even lower. Geopolitical developments in Russia and Ukraine and their impact on markets, FPI outflows in recent months, market volatility, and March being unsuitable for large public offerings have also raised new concerns.
At least two key officials have said that the timing of LIC’s IPO may be untimely due to a number of factors.
“The main focus is on policyholders. While there are nearly 30 million LIC policyholders, less than 4 million PANs are associated with their policies. Even fewer numbers have demat accounts. Although LIC has been pushing its policyholders People are linking their PAN with their policies and policyholders to open Demat accounts, but we’re not sure enough has happened on that front,” a source said. He added that the current market volatility also does not bode well for a major problem.
Another official, speaking on condition of anonymity, said the general weakness in the market and the sharp outflow of FPIs are another reason why LIC is not going ahead with an IPO now. Over the past two months, FPIs have net withdrawals of over Rs 64,461 crore. “March is usually not a good time to deal with big issues as companies have to file withholding taxes, so market liquidity is low. Although the market has been soft in recent months and FPIs have been pulling a lot of money out of Indian equities , but recent geopolitical concerns are raising new concerns,” he said.
If you go into a choppy market with a big theme, he added, “not only do you risk signing up, but you’re not getting a good price or a premium, so you’re going to lose your return.” Less. You shouldn’t go public just because you want to meet your divestment goals this year. I don’t think it was the right decision,” the official said.
LIC is expected to raise around Rs 60,000 crore from the public offering. Last week, LIC chairman MR Kumar expressed his willingness to launch his own IPO this financial year. “We are closely monitoring geopolitical developments. We are excited about the March listing,” Kumar said last week, referring to market volatility and developments in Ukraine.
Complete News Source : The Indian Express
