Govt may defer LIC IPO to next fiscal amid Ukraine crisis: Experts

The IPO would have helped meet the curtailed disinvestment target of ₹78,000 crore this fiscal

The government is expected to defer the mega initial public offering (IPO) of LIC to the next financial year as the ongoing Russia-Ukraine war has dampened fund managers' interest in the public issue, market experts said on March 6.

The government was looking to sell a 5% stake in Life Insurance Corporation (LIC) this month, which could have fetched over ₹60,000 crore to the exchequer.

The IPO would have helped meet the curtailed disinvestment target of ₹78,000 crore this fiscal.

"The current geopolitical issue between Russia and Ukraine makes the global equity markets jittery. Indian markets also reacted negatively to this development and corrected nearly 11% from its all-time high.

"Thus, the current market volatility is not conducive for the LIC IPO, and the government is most likely to defer the issue to next fiscal year," Arijit Malakar, Head of Retail Equity Research, Ashika Group, said.

Generally, in a highly volatile market, investors tend to play safe and refrain from making fresh investments. Thus, the equity market needs to be stable, so that investors can get the confidence to make the investment in the LIC IPO.