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With volatile market scenario amid the Russia-Ukraine conflict raising concerns for the much-awaited initial public offering (IPO) of insurance behemoth Life Insurance Corporation of India (LIC), Tuhin Kanta Pandey, the Secretary for Department of Investment and Public Asset Management (DIPAM) on Monday said that there is strong investor interest for the state-run company's offer, but Centre will proceed with the IPO only when it is confident of successfully listing the insurer.
Speaking at the Mint India Investment Summit 2022, Pandey also exuded confidence on the progress of the government's asset montisation plan and said that there is a "good prospect" of achieving the target of ₹88,000 crore of asset monetisation for FY22.
He also informed that DIPAM has received multiple expressions of interest (EoI) for privatisation of HLL Lifecare Ltd (HLL).
Talking of the LIC IPO, he observed that the filing of the DRHP was well within the anticipated timeline, but the current volatile market scenario is a result of unanticipated global events emerging out of the geopolitical tensions which the government is closely monitoring.
"LIC IPO is a large offering and we want it to go off well. Of course, we have enthusiasm. In terms of timings, we are watching the market closely. We will surely bring it as soon as we feel we will comfortably carry it off," Pandey said during a fireside chat at the event.
He also said the financial results of the company for the quarter ended December will also be submitted with SEBI as an addendum to the DRHP.
Mint on Monday reported that LIC will go public in April instead of March as decided earlier as the ongoing market turbulence makes the government wary of rushing India’s largest initial public offering.
Though the Securities and Exchange Board of India has cleared LIC’s IPO in a record 22 days, the government needs a minimum of 15 days to sign on anchor investors before opening up the sale for retail investors and policyholders.
Regarding impact of the pandemic on the LIC disinvestment, the secretary said that the pandemic and its several waves impacted particularly strategic disinvestment processes as they require engagement with investors, due diligence, site visits among other.
However, he said that the the disinvestment process is now "back on the track"
On the government policy of privatisation, he said: "The policy of privatisation is more stable, it is a median to long-term."
He further said that one of the main objectives of the government's privatisation policy is raising the economic and job generation capacity of public sector companies.
Speaking on the national asset monetisation program, he said that every department has pitched in for the progamme and some departments have so far made more progress than other in terms of asset monetisation. He also said that the idea of asset monetisation is to increase capex and it has significant impetus on the economy.
He noted that the Ministry of Road Transport and National Highways has monetised assets worth ₹17,000 crore while ₹1,300 crore has been derived from airports.
On the special purpose vehicle, recently cleared by the Union Cabinet for monetisation of land assets, he said several CPSEs which have large parcels of unutilised land have not been able to dispose them and no ministry has organisation capacity to handle the monetisation of these assets and hence the SPV will take over the task to carry on the process in a much more coordinated way.
He said that the Department of Public Enterprises has been interested in setting up this SPV going forward.
Last week, the Union Cabinet approved setting up National Land Monetization Corporation (NLMC) to undertake monetisation of surplus land and building assets of central public sector enterprises (CPSEs) and other government agencies.
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