Pedigree stock offerings as of the LIC, do come by rarely. Virtually a sovereign blue chip, there ought to be little hesitation by the government to ahead with the IPO as scheduled. Post Ukraine invasion, investment sentiment is likely to be subdued and the intended price band far too higher than the prevailing mood.

AIG, the US insurance conglomerate successfully weathered the 2008 global financial crisis thanks to its marquee status that had the US Fed advancing a small fortune against collateral stock.

The government too would be motivated to trim and re-purpose a company that would hence stand to be assessed in an open market, on a day-to-day basis.

R Narayanan

Navi Mumbai

It refers to “ IPO Dilemma”. LIC IPO is the biggest in the history and the government has been preparing for it for a while now. It hopes mop up ₹63,000 crore by selling 5 per cent stake in it. But due to the Russia-Ukraine crisis things have changed drastically in the last fortnight and now the LIC IPO is hanging fire.

If the government puts off the IPO it will surely miss its disinvestment target. But should the government solely focus on the disinvestment target and deny itself and investors good returns?

The government must delay the IPO. It is a positive sign that the Finance Minister has also indicated that she might look at the timing of the IPO again. The government must go ahead with the IPO once the Russia-Ukraine crisis cools down. 

Bal Govind

Noida

Pension or NPS

There are reports of unions clamoring for the old pension system in place of the market-linked NPS. The NPS is a reformist tool which aims to shift the burden of pension payments away from the honest taxpayers and economically weaker population.

Higher pension payouts against the old system will cause greater fiscal deficit and stoke inflation which will badly hurt our weaker, vulnerable unorganised sector countrymen; the organised government sector retirees who also have collective bargaining strength, will enjoy protection from inflation due to inflation linked allowances in their pension.

Why should our weaker, vulnerable countrymen suffer?

V Vijaykumar

Pune

The sanctions quagmire

This refers to “Sanctions not likely to checkmate Putin” (March 3. In an interdependent world, banks play a significant role in promoting trade among countries and it is here that sanctions could hit Russia due to economic restrictions imposed by US, EU, UK and other countries.

US sanctions are the most stringent as the dollar is a reference currency and banks will be under the scanner to ensure that sanctions are implemented in toto. With Russia having been prohibited from using SWIFT messaging platform, the purpose is to totally isolate Russia and cripple its trade operations. On the flip side the move cannot be sustained for long without having counter effects on countries especially US.

Countries like China, Russia have significant portion of their reserves invested in US treasury papers. With US economy gradually looking up post Covid, sanctions would restrict Russia from trading in US securities which will have an adverse impact on the dollar.

Russia being a major crude oil exporter this would hit major oil trading partners very hard in the long run as predominantly they are billed in dollars.

Sanctions imposed by other multilateral agencies further complicates the issue. Overall apart for economic reasons, banks will be facing challenges in ensuring implementation of sanctions hence they cannot be sustained for long.

Srinivasan Velamur

Chennai

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