IPO Update: TOP 5 PSUs that May Hit Primary Market with their IPOs in 2022

The initial public offering (IPO) is not only a corporate method of raising money anymore. Even the government is attempting to raise capital through public-sector enterprises. To raise capital, the Indian government has privatized, merged, disinvested, and sold shares in recent years. Following the exercise, the Indian government intends to launch an IPO in the coming years, most likely in 2022. The government plans to issue initial public offerings (IPOs) for a number of PSUs in order to raise funds.

Let’s have a look on the top five PSUs that may open this year:

1. LIC:

The Life Insurance Corporation of India (LIC) is not only a government-owned company, but it is also the largest initial public offering (IPO) ever listed on the stock exchange in India. According to officials from the Indian government, the LIC IPO will be completed by the end of March, ending FY 2021-22.

Having said that, the IPO is being described as the largest in Indian IPO history, and it will be a key factor in the growth of the Indian capital market in 2022. The central government is frantically working to get the LIC listed on stock exchanges. The date of the IPO, the price of the stock, and other details are still to be determined. More accountability and transparency are among the government’s reasons for supporting the LIC IPO. However, insurance has always been responsible, with a perfect track record of safeguarding policyholders’ interests.

It is this year’s most anticipated issue, but the company is still yet to submit its DRHP and will require numerous clearances and regulatory approvals before entering the primary market.

2. ECGC Ltd.

The Export Credit Guarantee Corporation of India Ltd (ECGC Limited) is a government-owned export credit provider. It is owned by the Ministry of Commerce and Industry of the Government of India, which is headquartered in Mumbai, Maharashtra. It helps Indian exporters with export credit insurance.

Exporters and bankers use the company’s online services to obtain information and submit documents. The IPO of ECGC was approved by Cabinet last year. The government intends to increase exports by Rs. 5.28 lakh crores and ECGC’s underwriting capacity by Rs. 88,000 crores over the next five years. A stock market listing would also allow this company to access new funds from the market, allowing it to increase its maximum liability coverage. The IPO is expected to debut in 2022, as the process with SEBI is currently underway.

3. National Seeds Corporation Limited

The government owns the entire company of National Seeds Corporation Ltd. The Department of Agriculture Corporation and Farmer’s Welfare, Ministry of Agriculture Corporation, and Farmers Welfare are in charge of its administration. In various agro-climatic settings across the country, around 8 farms and 12500 registered seed farmers are working on seed production programmes. NSC has devised a thorough Quality Control system to ensure that farmers receive high-quality seed. To conduct seed testing and quality control, NSC has established four Quality Control Laboratories in Bhopal, New Delhi, Suratgarh, and Secunderabad.

The government of India is willing to sell up to a 25% stake in the company through the IPO. NSC, a Mini Ratna PSU, made a profit after tax of Rs 29.92 crore in fiscal year 2019-20. As of March 31, 2020, it had a net worth of Rs 646.37 crore. The IPO is expected to go public in 2022.

4. WAPCOS Limited

WAPCOS Limited, formerly known as Water and Power Consultancy Services (India) Limited, is an Indian multinational government undertaking and consultancy firm owned entirely by the Indian Ministry of Jal Shakti. Water resources, power, and infrastructure are among the areas where the firm provides consulting services. It began operations in 1969 and is now an ISO 9001:2015 certified “Mini Ratna” company with projects in India, Asia, and Africa.

WAPCOS (Water and Power Consultancy Services) is a government-owned corporation. It is in charge of providing services such as consultation, procurement, engineering, and construction in the electricity, water, and infrastructure sectors. WAPCOS was promoting its IPO strategy aggressively at the start of the year. However, with the arrival of the second wave of Covid-19, this was pushed to the background. WAPCOS is gathering data on all of its international operations at the moment. The procedure is expected to take a few months to complete. Once the agreement is finalised, we can expect concrete developments at the forefront of its public offering.

5. North Eastern Electric Power Corporation Limited

National Thermal Power Corporation Limited, Ministry of Power, Government of India, owns North Eastern Electric Power Corporation Limited (NEEPCO). It was established on April 2, 1976, with the mission of planning, investigating, designing, constructing, generating, operating, and maintaining power stations in India’s North Eastern region. Schedule A-Miniratna Category-I CPSE status has been granted to NEEPCO.

As part of its asset monetization strategy, NEEPCO intends to issue initial public offerings (IPOs). The NTPC is also reinvesting in its two other subsidiaries. In the coming years, NEEPCO will begin developing a strategy to generate electricity from non-conventional sources of energy, with a focus on solar and wind power. According to reports, the IPO will likely go public in FY 2022-23 or may be delayed further.