Uncertainty over LIC IPO could hit government’s revised disinvestment target for FY22

India may miss its revised disinvestment target for the second time in eight years in 2021-22, as the government may be unable to generate the estimated Rs 600 billion through the LIC’s IPO. The government was scheduled to proceed with the sale of LIC’s shares, and draft paperwork for the transaction was also filed with SEBI. However, the Russia-Ukraine conflict has had a significant influence on financial markets, and has compelled the government to reconsider the date of the IPO. If the IPO does not succeed in reaching the market by March 31, 2022, the government will face a massive shortage in disinvestment mop-up. The government has so far collected Rs 124 billion and was betting on the LIC IPO to meet the increased target of Rs 780 billion.

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