Do you keep the latest information regarding stock markets? Have you heard of the latest IPO that LIC announced? Are you dubious about investing in it? Then, you will find the following information beneficial.
In this report, we have mentioned facts about the latest stock launch declaration by LIC. However, Investors and share market enthusiasts from India want to clear their doubts about participating in it. Therefore, please continue reading to know the Key challenges LIC may face to make its IPO a success.
What is an IPO?
An IPO stands for Initial Public Offering. Companies use this technique to sell their shares to interested investors. Through this, they raise funds required to support the company and ease the trading process in the future.
IPO Announcement By LIC
The LIC or the Life Insurance Corporation of India is a renowned and trusted insurer organization in the nation. It has provided service to the citizens since 1956 and helped them financially. On 16 February 2022, LIC declared that it would make its shares go public. However, this may be a challenging task for this reliable company.
Key challenges LIC may face to make its IPO a success
Some recent activities may make the IPO a challenging task to conclude by the LIC authorities. We have mentioned in this section some reasons to substantiate this subject.
- Russian Invasion in Ukraine – This is the most recent reason why LIC may find it difficult to sell its initial shares. After Russia declared its entry into Ukrainian areas, oil prices surged by many folds worldwide. Moreover, the strict sanctions of the US government and its allies on Russia will strongly impact the global financial situation. Thus, it is one of the Key challenges LIC may face to make its IPO a success that people are apprehensive of.
- Depression in Share Market – The stock marketing industry has recently witnessed a downfall, quite unpredictably. Prominent companies like Cartrade, Paytm, FINO Payments, Star Health & Allied Insurance, Policybazaar, Zomato, etc., could not rise significantly from the past month. This fact instilled doubts in the investors’ minds regarding the LIC IPO as well.
- Non-Availability of FPIs – The Foreign Portfolio Investors have not been active in the stock marketing industry for the past few months. As they contribute to large amounts of capital-raising, their absence is amongst the Key challenges LIC may face to make its IPO a success.
- Time Crunch – Although LIC is a trusted brand, its IPO venture has suffered a setback due to the global and national scenarios. Unfortunately, the end of this fiscal is around the corner. Thus, to abide by the government norms, it has lesser time to make its IPO successful, adding to the challenges.
Conclusion
Due to the prevalent reasons, investors are wary of this IPO. Nonetheless, the Indian government may approve Foreign Direct Investment in this IPO. Furthermore, please know Is it a good time to invest in gold?
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