India’s surprise rate hike may undercut its biggest ever IPO

The Reserve Bank of India’s (RBI) move to raise a key interest rate was necessary, but badly timed for the country’s largest initial public offer (IPO).

After two years of wait, the Life Insurance Corporation (LIC) of India finally kicked off its much-awaited IPO yesterday (May 4), with the government hoping to raise 21,000 crore rupees ($2.7 billion) over the next three days.

It has attracted massive interest from retail investors and the company’s policyholders. But its success will also rest on foreign institutional investors, and their response so far has been lukewarm.

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