NEW DELHI : The uncertainties surrounding the initial public offering (IPO) of Life Insurance Corp. of India (LIC) are likely to delay the Centre’s plans to list three other public companies, Export Credit Guarantee Corp. of India (ECGC), WAPCOS and National Seeds Corp. Ltd, according to a senior government official.
While LIC’s IPO was scheduled for March, volatility in the Indian stock market amid the escalating Russia-Ukraine crisis prompted the Center to postpone it until late April or early May, Mint reported more. early.
The move will have a cascading effect on the government’s listing plans for other public sector companies, which, in turn, could affect its FY23 divestment target, the official said, seeking anonymity. .
The original plan was to launch the listing processes for the three public sector companies in the first quarter, shortly after LIC’s market debut, but with the delay of the insurance giant’s IPO, the most small IPOs have taken a back seat, he added.
“Market conditions (for LIC) are not good due to volatility, so others will also take time (to list).”
The requests sent to the Ministry of Finance did not elicit a response on Thursday.
The Secretary of the Department of Investment and Public Assets Management (DIPAM), Tuhin Kanta Pandey, said after the announcement of the Union budget in February that the Center would start the registration process of the three companies of the public sector, starting with WAPCOS, in which the government is likely to offload a 25% stake.
The ministry had already launched tenders to hire a registrar and an advertising agency for the divestiture process in February 2021.
WAPCOS operates under the Jal Shakti Ministry and was incorporated in June 1969. It is a consulting and engineering, procurement and construction (EPC) company offering solutions for sustainable water development , electricity and infrastructure.
Last November, DIPAM also began the process of selling a 25% state stake in National Seeds Corp. The Category I Public Sector Central Agricultural Enterprise is a for-profit mini-ratna under the administrative control of the Ministry of Agriculture and net worth of ₹646.37 crores.
The first step in the Export Credit Guarantee Corp. registration process. of India, which falls under the Ministry of Commerce, started in September, with the approval of the Union Cabinet.
The government has also agreed to invest ₹4,400 crore in the Mumbai-based credit provider over a five-year period to support exporters as well as banks and increase exports to ₹5.28 trillion. It also aims to increase ECGC’s underwriting capacity by ₹88,000 crore by 2027.
LIC’s IPO will be the largest such offering to hit Indian equity markets and is expected to help the government achieve its divestment target of ₹65,000 crore for FY23. As of April 19, the government has collected ₹3,026 crore from Oil and Natural Gas Corp.’s sale offer. ltd.
The government also plans to complete the strategic sale of Bharat Petroleum Corp. Ltd, Shipping Corp. of India Ltd, Bharat Earth Movers Ltd and Pawan Hans among others in this fiscal year to achieve its divestment target.
The Center did not meet FY22’s disposal target of ₹78,000 crore by a huge margin, closing the year at just ₹13,530 crore through divestments with the sale offer of four entities and the strategic sale of Air India.