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LIC IPO set to be delayed to next fiscal year amid market swings: Report

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LIC's underwriters have seen muted interest during early meetings with potential anchor investors, says Bloomberg.

Life Insurance Corporation

The mega initial public offering of Life Insurance Corporation of India is set to be delayed into the next financial year amid market swings triggered by Russia’s invasion of Ukraine, people with knowledge of the matter said.

Bankers and officials are preparing to shift the listing of the state-run insurer to after the current fiscal year, which ends in March, the people said, asking not to be identified because the matter isn’t public. A formal announcement could be expected this week or next, they added, with one person saying the sale may happen as soon as April if market volatility eases.

LIC’s underwriters have seen muted interest during early meetings with potential anchor investors, according to the people. Many fund managers have been wary of making major commitments amid the market volatility, the people said.

A finance ministry spokesman didn’t immediately respond to a call on his mobile phone. LIC declined to comment.

LIC’s IPO will be the biggest to be impacted by the war, which has wiped out 6% of BP Plc’s market value and over $3 trillion of global market capitalization since tensions started rising from Feb. 18. Indian Prime Minister Narendra Modi had sought to raise as much as 654 billion rupees ($8.7 billion) from the deal, Bloomberg reported earlier, cash that is crucial to plug a gap in the budget deficit for the year through March 31.

India Finance Minister Nirmala Sitharaman said this week she “wouldn’t mind” taking another look at the timing of the LIC offering, though ideally she’d like to go ahead with it. Even if it doesn’t pursue the share sale on the original timeline, the government is still hoping to complete the IPO in the next few months, the people said.

The deferment will be another setback for India, which has massively scaled down its asset sale target after the delay in privatization of other state-run companies, including Bharat Petroleum Corp Ltd. Modi’s administration had hoped to shrink the shortfall to 6.9% of gross domestic product, with the accounting for some 3% of revenue.

The government had also penciled in a record market borrowing for the financial year starting April 1.

India had offered to sell a 5% stake, or about 316 million shares in the insurer in what was seen as India’s Aramco moment. Just like the Gulf oil giant’s $29.4 billion listing, the world’s largest, LIC’s debut would test the depth of the nation’s capital markets and global appetite for the state-owned entity.

Also Read| Need for effective communication strategy to manage expectations: RBI Governor Shaktikanta Das

Need for effective communication strategy to manage expectations: RBI Governor Shaktikanta Das

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The conduct of monetary policy has undergone notable changes in India and across the world as economies and markets evolved and policymakers gained greater insights into how economic agents interact in a complex economic system, he said while delivering a lecture at the National Defence College

Need for effective communication strategy to manage expectations: RBI Guv |  Business Standard News

Reserve Bank Governor Shaktikanta Das on Friday underlined the need for an effective communication strategy at the central banks, stressing that "monetary policy is an art of managing expectations”.

The conduct of monetary policy has undergone notable changes in India and across the world as economies and markets evolved and policymakers gained greater insights into how economic agents interact in a complex economic system, he said while delivering a lecture at the National Defence College.

"As monetary policy is an art of managing expectations, central banks have to make continual efforts to shape and anchor market expectations, not just through pronouncements and actions but also through a constant refinement of their communication strategies to ensure the desired societal outcomes,” he said.

The communication works both ways while too much communication can confuse the market, too little may keep it guessing about the central bank’s policy intent, he added.

The Reserve Bank of India has actively used communication through a variety of tools the MPC resolutions and minutes, exhaustive post-policy statements together with a statement on developmental and regulatory measures, press conferences, speeches and other publications, especially the biannual Monetary Policy Report (MPR) – to anchor expectations, Das said.

The governor informed that price stability under the statute has been defined numerically by a target of 4 per cent for headline Consumer Price Index (CPI) with a tolerance band of +/- 2 per cent around it.

The flexibility in the FIT (flexible-inflation targeting) regime comes from provisions to accommodate or see-through transitory supply-side shocks to inflation.

Failure to meet the monetary policy objective is defined in terms of average headline CPI inflation remaining lower or higher than the 2 to 6 per cent band for three consecutive quarters, rather than any instance where inflation exceeds/falls below the target.

"This helps monetary policy to avoid undue volatility in rate-setting behaviour that may adversely impact growth,” he said.

"The clearly defined inflation target and the band, the setting up of the MPC, the explicit accountability mechanisms for defining failure in meeting the target, the detailed resolution and the quick release of individual assessments in the minutes have strengthened transparency and credibility of monetary policy formulation in India,” Das said.

Read Also| Europe's largest nuclear power plant in Ukraine on fire after shelling

Services activity improves slightly in February, PMI rises to 51.8 from 51.5 in January

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The rise in the services PMI follows that of the manufacturing index, although the extent of the increase is smaller

Services activity improves slightly in February, PMI rises to 51.8 from 51.5  in January.

India's services activity improved slightly in February, with the sector's Purchasing Managers' Index (PMI) rising to 51.8 from 51.5.

Data released on March 4 by IHS Markit showed the services sector barely shrugged off the malaise caused by the Omicron variant-led third wave of COVID-19, which had dragged services activity to a six-month low in January.

A PMI reading above 50 shows expansion in activity, and one below 50 indicates contraction.

"Growth in the service sector failed to rebound as meaningfully as many would have hoped given that COVID-19 cases receded considerably from January's new wave and restrictions were lifted," noted Pollyanna De Lima, Economics Associate Director at IHS Markit.

"New business and services activity expanded only modestly, and at the second-slowest rates since last July. Looking at the anecdotal evidence supplied by survey participants, inflationary pressures, input shortages and the local elections dampened growth," De Lima added.

While service providers faced higher costs due to a rise in prices of chemicals, energy, food, labour, metals, plastics, and retail-related components, the increase in input cost inflation was lower than January's 10-year high.

Service providers continued to pass on these higher costs to consumers in February, although the output price inflation cooled down to a five-month low.

Even as prices continued to increase, new business increased at a faster - albeit lower than average - rate last month. On the downside, new business from abroad fell at the fastest rate since October 2021. Consequently, services sector employment fell for the third consecutive month in February. Worryingly, the fall in employment last month was the fastest since July 2021.

The marginal increase in the services PMI in February meant the composite index only edged up to 53.5 from 53.0. Data released on March 2 had shown the manufacturing PMI had risen to 54.9 in February from 54.0 in January.

Also Read| Europe's largest nuclear power plant in Ukraine on fire after shelling

Europe's largest nuclear power plant in Ukraine on fire after shelling

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A spokesman for Europe's largest nuclear plant says the facility is on fire after Russia attacked the power station in the southern Ukrainian city of Enerhodar.

Vladimir Putin

Russian forces pressed their attack on a crucial energy-producing Ukrainian city by shelling Europe’s largest nuclear plant early Friday, sparking a fire and raising fears that radiation could leak from the damaged power station.

The assault on the eastern city of Enerhodar and its Zaporizhzhia nuclear plant came as the invasion entered its second week with Russian forces gaining ground in their bid to cut off the country from the sea. Elsewhere, another round of talks between the two sides yielded a tentative agreement to set up safe corridors inside to evacuate citizens and deliver humanitarian aid.

Nuclear plant spokesman Andriy Tuz told Ukrainian television that shells were falling directly on the facility and had set fire to one of its six reactors. That reactor is under renovation and not operating, but there is nuclear fuel inside, he said.

Firefighters cannot get near the flames because they are being shot at, he said, and Ukrainian Foreign Minister Dmytro Kuleba tweeted a plea to the Russians to stop the assault and allow fire teams inside.

ALSO READ: Russia-Ukraine conflict: Another Indian student shot in Kyiv, hospitalised

“We demand that they stop the heavy weapons fire,” Tuz said in a video statement. “There is a real threat of nuclear danger in the biggest atomic energy station in Europe.”

The attack renewed fears that the invasion could result in damage to one of Ukraine's 15 nuclear reactors and trigger another emergency like the 1986 Chernobyl accident, the world’s worst nuclear disaster, which happened about 110 kilometers (65 miles) north of the capital.

The American Nuclear Society condemned the attack but said the latest radiation levels remained within natural background levels.

“The real threat to Ukrainian lives continues to be the violent invasion and bombing of their country,” the group said in a statement from President Steven Nesbit and Executive Director and CEO Craig Piercy.

The plant’s reactor is a different type than the one used at Chernobyl, and there should be little risk if the containment vessel is not damaged and outside power can be restored, said Jon B. Wolfsthal, a former senior director for arms control and nonproliferation at the National Security Council and former special adviser to then-Vice President Joe Biden.

“Everyone needs to take a step back and not jump to conclusions,” Wolfsthal, now a senior adviser at Global Zero, said on Twitter.

The Atomic Energy Agency said it was in contact with authorities in  The agency's director general, Mariano Grossi, urged military forces to refrain from violence near the plant.

The mayor of Enerhodar said earlier that Ukrainian forces were battling Russian troops on the city’s outskirts. Video showed flames and black smoke rising above the city of more than 50,000, with people streaming past wrecked cars, just a day after the U.N. atomic watchdog agency expressed grave concern that the fighting could cause accidental damage to Ukraine’s 15 nuclear reactors.

The Ukrainian state atomic energy company reported that a Russian military column was heading toward the nuclear plant. Loud shots and rocket fire were heard late Thursday.

“Many young men in athletic clothes and armed with Kalashnikovs have come into the city. They are breaking down doors and trying to get into the apartments of local residents,” the statement from Energoatom said.

Later, a live streamed security camera linked from the homepage of the Zaporizhzhia plant showed what appeared to be armored vehicles rolling into the facility’s parking lot and shining spotlights on the building where the camera was mounted.


ALSO READ: Watchdog says Chernobyl staff are exhausted amid Ukraine conflict

There were then what appeared to be bright muzzle flashes from vehicles, followed by nearly simultaneous explosions in the surrounding buildings. Smoke then rose into the frame and drifted away.

While the huge Russian armored column threatening Kyiv appeared bogged down outside the capital, Vladimir Putin's forces have brought their superior firepower to bear over the past few days, launching hundreds of missiles and artillery attacks on cities and other sites around the country and making significant gains in the south.

Ukrainian Prime Minister Denys Shmyhal called on the West to close the skies over the country's as fighting intensified. "It is a question of the security of the whole world!” he said in a statement.

The U.S. and NATO allies have ruled out creating a no-fly zone since the move would pit Russian and Western military forces against each other.

The Russians announced the capture of the southern city of Kherson, a vital Black Sea port of 280,000, and local Ukrainian officials confirmed the takeover of the government headquarters there, making it the first major city to fall since the invasion began a week ago.

Heavy fighting continued on the outskirts of another strategic port, Mariupol, on the Azov Sea. The battles have knocked out the city's electricity, heat and water systems, as well as most phone service, officials said. Food deliveries to the city were also cut.

Associated Press video from the port city shows the assault lighting up the darkening sky above largely deserted streets and medical teams treating civilians, including one inside a clinic who appeared to be a child. Doctors were unable to save the person.

Severing Ukraine's access to the Black and Azov seas would deal a crippling blow to its economy and allow to build a land corridor to Crimea, seized by Moscow in 2014.

ALSO READ: A look at how the West is punishing Russia for its invasion on Ukraine

Overall, the outnumbered, outgunned Ukrainians have put up stiff resistance, staving off the swift victory that appeared to have expected. But a senior U.S. defense official, speaking on condition of anonymity, said Russia’s seizure of Crimea gave it a logistical advantage in that part of the country, with shorter supply lines that smoothed the offensive there.

Ukrainian leaders called on the people to defend their homeland by cutting down trees, erecting barricades in the cities and attacking enemy columns from the rear. In recent days, authorities have issued weapons to civilians and taught them how to make Molotov cocktails.

“Total resistance. ... This is our Ukrainian trump card, and this is what we can do best in the world,” Oleksiy Arestovich, an aide to Ukrainian President Volodymyr Zelenskyy, said in a video message, recalling guerrilla actions in Nazi-occupied during World War II.

The second round of talks between Ukrainian and Russian delegations was held in neighboring Belarus. But the two sides appeared far apart going into the meeting, and Putin warned Ukraine that it must quickly accept the Kremlin's demand for its “demilitarization" and declare itself neutral, renouncing its bid to join NATO.

Putin told French President Emmanuel Macron he was determined to press on with his attack "until the end,” according to Macron's office.

The two sides said that they tentatively agreed to allow cease-fires in areas designated safe corridors, and that they would seek to work out the necessary details quickly. A Zelenskyy adviser also said a third round of talks will be held early next week.

Despite a profusion of evidence of civilian casualties and destruction of property by the Russian military, Putin decried what he called an “anti-Russian disinformation campaign” and insisted that Moscow uses “only precision weapons to exclusively destroy military infrastructure.”

Putin claimed that the Russian military had already offered safe corridors for civilians to flee, but he asserted without evidence that Ukrainian “neo-Nazis" were preventing people from leaving and were using them as human shields.

He also hailed Russian soldiers as heroes in a video call with members of Russia's Security Council, and ordered additional payments to families of men killed or wounded.

A top Russian officer, Maj. Gen. Andrei Sukhovetsky, commander of an airborne division, was killed in the fighting earlier this week, an officers organization in reported.

The Pentagon set up a direct communication link to Russia's Ministry of Defense earlier this week to avoid the possibility of a miscalculation sparking conflict between Moscow and Washington, according to a U.S. defense official who spoke on condition of anonymity because the link had not been announced.

The fighting has sent more than 1 million people fleeing Ukraine, according to the U.N., which fears those refugee numbers could skyrocket.

The immense Russian column of hundreds of tanks and other vehicles still appeared to be stalled roughly 25 kilometers (16 miles) from Kyiv and had made no real progress in days, amid fuel and food shortages, according to U.S. authorities

Article Source:-  Business Standard.

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