LIC IPO soon, govt watching market situation carefully: Dipam Secretary

Amid the relief rally in the equity markets as Russia–Ukraine conflict showed signs of easing, and crude oil prices too cooled off, the government said it is watching the market situation and is hopeful that the initial public offering (IPO) of the Life Insurance Corporation (LIC) will be launched soon.

"We may be good to go and we are watching the market situation. Hopefully, we should be able to bring out the IPO soon," said Tuhin Kanta Pandey, secretary, Department of Investment and Public Asset Management (Dipam) at an interaction organised by the Merchants' Chamber of Commerce and Industry.

"There are certain external factors affecting the markets because of the conflict in Europe and the government is watching the situation carefully," Pandey said, without indicating any timeline for the LIC IPO, which was supposed to be brought out this month. The DRHP for the LIC IPO was filed last month with the Securities and Exchange Board of India (SEBI). Pandey said that SEBI has accorded prima facie clearance to the IPO, subject to fulfilment of certain requirements.

"We hope things will recover, oil prices will probably cool off and our hope is that volatility in the market will come down as the markets will come down with the new realities," Pandey said.

It may be noted that the Russian invasion of Ukraine, which began on February 24, led to a sharp correction in the Indian equity markets in line with the global markets. Taking cue from the market conditions, some of the merchant bankers wrote to the government to delay the IPO as the situation may not be conducive enough. Last Friday, a group of ministers, which includes finance minister Nirmala Sitharaman, commerce minister Piyush Goyal and transport minister Nitin Gadkari, held a meeting on LIC IPO timing.

On other privatisation transactions, Pandey said Bharat Petroleum Corporation, BEML, Shipping Corporation of India, and Pawan Hans are at an advanced stage.

"The Centre will soon invite expression of interest for the privatisation of the IDBI Bank, Vizag Steel plant, Concor NMDC Steel and Ferro Scrap Nigam," Pandey said.

On asset monetisation, Pandey said that the government is all set to exceed the current year's target of ₹88,000 crore, out of which a mega portion of ₹50,000 crore will accrue from the mining sector under the mine developer and operator segment.

"In road sector, asset monetisation worth ₹17,000 crore has already been done and Power Grid Corporation of India has realised ₹7,500 crore," Pandey said.

Taking cues from failure of the PPP is the past, the Centre is mindful of risk allocation in the asset monetisation cases. "If we allocate excess risk to the private player, then they might fail as what happened in the first round of public private partnership," said Pandey.