Ukraine conflict can impact FII participation in LIC IPO

7 Mar 2022 , 03:56 PM

The ongoing Ukraine-Russia war may cast its shadow on the much awaited the mega initial public offering (IPO) of Life Insurance Corporation of India (LIC). Sanctions imposed on Russia for its invasion of eastern Ukraine will likely dampen participation from foreign institutional investors (FIIs) in the coming initial public offering by LIC, according to a report published in Mint.

According to another media report the IPO is set to be delayed into the next financial year amid heightened uncertainty over Russia-Ukraine war crisis which led the market sentiments doomed.

Russia has been faced with a barrage of united sanctions from the US and Europe for its movements in Ukraine, including ejection of several banks from financial messaging platform SWIFT, leading to tightening of investor funds. The sanctions have become an issue for the global investors, according to reports.

US investors with interests in the suffering Russian market are “not in a position to withdraw any securities and invest them in something like an LIC”, Mint report said.

Escalating prices of crude oil which impacts inflation and volatility in the Indian markets as a fallout of the ongoing crisis are also being weighed by the government in deciding the timing,” the report added.

LIC is yet to decide on the offer price for the listing, but the IPO is poised to be the largest in Indian stock market history and is crucial for the Centre to meet its Rs78,000 crore divestment target for FY22.