LIC’s IPO may force startups to defer their own listings

LIC’s IPO is expected to raise Rs. 70,000 crore, convincing other companies to delay their listing until there is more liquidity in the primary market.
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In November 2021, Paytm listed the biggest initial public offering (IPO) in Indian corporate history with a valuation of Rs. 18,300 crore. Life Insurance Corporation of India (LIC) is rumoured to be planning to dwarf that record soon with a Rs. 70,000 crore listing, and LIC's IPO is projected to be a huge success!

No wonder other companies that had planned to go public this year are having second thoughts. Wary of a highly volatile market and a series of IPOs from 2021 that have not delivered favorable returns are reasons that give jitters to companies in the IPO que that the retail market will run dry after the LIC IPO.

Leading startups including Flipkart, Swiggy, Delhivery, and MobiKwikare planning IPOs in 2022, and may now be forced to reconsider their listing dates. According to primary market activity tracker Prime Database, around 45 companies have listed draft red herring prospectus (DHRP) with the market regulator SEBI in preparation for an IPO this year.

“Several companies that have received SEBI nod are in wait-and-watch mode, ” Ajar Saraf, executive director at ICICI Securities was quoted by Economic Times.

“They would rather wait for the markets to stabilise and LIC to complete the IPO process before going ahead with their respective IPOs,” continued Saraf.

The next few months promises a lot of excitement for the retail investor, and we should see some exciting startup listings even if LIC’s mammoth IPO pushes the date back a bit!

Edited by Rajiv Bhuva