‘LIC IPO to go ahead; worried if market situation conducive’

Finance Minister Nirmala Sitharaman on Tuesday said the government will go ahead with the initial public offering (IPO) of Life Insurance Corporation (LIC) amid concerns being raised over the possible impact of the escalating tension between Russia and Ukraine. She, however, said the government is “equally worried if the market situation is conducive”.

“The LIC draft red herring prospectus (DRHP) is out and we are seeing quite a buzz in the market about it. We are moving ahead with it,” said Sitharaman.

On February 13, LIC had filed its DRHP with the market regulator. The government plans to sell nearly 5 per cent stake in the life insurance giant for around Rs 65,000 crore, which could make it the most valuable company in the country.

Sitharaman said that the government is watching the Russia-Ukraine crisis closely. On being asked about its impact on trade, the Finance Minister said the Russia-Ukraine impact was yet to be felt on trade and added that the government is careful that exports do not suffer.

Sitharaman added she is looking into corporate governance lapses at the National Stock Exchange when Chitra Ramkrishna, its former MD & CEO, was at the helm, and if adequate corrective action was taken by the regulator. She said: “Although you would perceive that charges involving NSE matter are well established, I do not want to pre-empt the matter. I am going through the details and will come back after that.”

Ramkrishna has come under the scanner of multiple investigating agencies on allegations of leaking confidential information of the exchange to a third party.

On Tuesday, Sitharaman also chaired a meeting of the Financial Stability and Development Council (FSDC) in Mumbai.

Sitharaman said that increasing crude prices was discussed at the FSDC meeting.

“Very difficult to say how the crude prices are going to be; have to see how crude oil prices go; will keep a watch. Crude was one area which the FSDC looked at; situation in Ukraine is another headwind,” Sitharaman said.

Crude oil prices have recently been on the rise due to the escalating tensions between Russia and Ukraine. Russia is one of the biggest crude oil suppliers outside oil cartel OPEC.

On the issue of extension of compensation cess collection, the finance minister said the GST council had decided that the compensation cess collection will continue up to March 2026. “This has been decided to meet the shortfall in compensation cess collected and to pay the interest on borrowed money,” said Sitharaman.

On compensation to the states, Sitharaman further said that finance ministers of every state are present in the GST Council and there is no room for preferential treatment for any of the states. “What is applicable for one state is applicable for all,” she said.

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