India’s biggest IPO is also a big distraction

With India’s stock market outperforming its peers in Asia, now may seem an ideal moment for Prime Minister Narendra Modi to pull off his government’s biggest divestment transaction to date.

Yet for many global investors, India’s largest initial public offering ever is too little too late. It’s also a reminder that, 2,823 days into the Modi era, the Big Bang structural reforms New Delhi promised remain more talk than action.

To be sure, selling 5% of shares of state-run Life Insurance Corporation of India, or LIC, to raise about US$8 billion is no small feat. It will dwarf previous Indian IPOs by many magnitudes. And surely, Modi’s boosters can claim some measure of success for the pro-market policies the government rode to power in 2014.

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