Nirmala Sitharaman Says Government To Go Ahead with LIC Public Offer

Nirmala Sitharaman has said that government will go ahead with LIC’s IPO

Finance minister Nirmala Sitharaman on Tuesday emphasised that the government is going ahead with the initial public offer (IPO) of Life Insurance Corporation (LIC) as “there is a buzz in the market and interest”.

At the same time on a cautious note, she said that the government is worried whether “the market situation is conducive (for it)”.

“There is a buzz in the market and there is interest for LIC IPO. We are going ahead with it,” Ms Sitharaman said. She, however, added that “we are equally worried if the market situation is conducive”.

The finance minister made these comments during a press conference in Mumbai on the last day of her two-day visit to the city, today.

Ms Sitharaman’s comments came in the backdrop of the escalating tensions between Russia and Ukraine. The prevailing situation in eastern Europe has had negative repercussions on markets across the world. The oil prices have shot up sharply, crossing $99 per barrel earlier in the day.

The draft red-herring prospectus (DRHP) for the LIC IPO was released on February 13. The offer is for the sale of up to 316.25 million shares or around 5 percent held in LIC by the government.

The finance minister said that the DRHP’s release has fuelled interest in the IPO.

“I think the way it is crafted, it has generated a lot of interest,” she added.

Ms Sitharaman on the first day of her visit to Mumbai, had met industry, trade and financial market stakeholders to discuss the union budget.

Reuters had reported earlier that prospective investors in LIC’s IPO are seeking assurances from company management that it will not sacrifice their interests to meet the goals set out by the government, its controlling shareholder.

In virtual roadshows for India’s biggest ever public listing, LIC management and the IPO bankers have been peppered with questions about the insurer’s past investments and their quality, four people with knowledge of the matter said, the Reuters report had said.

Potential conflicts of interest issues are taking centre-stage in the IPO roadshows that began last week and are expected to go on till the end of the month, Reuters said, quoting sources.