Govt may defer LIC IPO to next fiscal amid Russia-Ukraine war: Experts

New Delhi: 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 Sunday.

The government was looking to sell five per cent stake in Life Insurance Corporation (LIC) this month, which could have fetched over Rs 60,000 crore to the exchequer. The IPO would have helped meet the curtailed disinvestment target of Rs 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 per cent 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. Echoing a similar sentiment, Tanushree Banerjee Co-Head of Research-Equitymaster, said the weak market sentiments, especially in the wake of the Ukraine-Russia war, have been a dampener for the IPO. While there is a possibility of the IPO getting postponed, the issue remains critical to the government's disinvestment plans.