India aims to launch its $8 billion listing of state-run Life Insurance Corp (LIC) by mid-April, two government sources said, after delaying what will be the country`s biggest ever IPO from this month due to market volatility.

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The government aims to raise more than $8 billion by selling a 5% stake in the country`s biggest insurance company. It had planned to launch it by the end of this fiscal year on March 31 but delayed the issue after Russia`s invasion of Ukraine made financial markets highly volatile.

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"Most likely, LIC would now be listed by mid-April," said a senior government official, with direct knowledge of the listing plans.

"We are closely watching the market conditions," the official said, noting stock markets could stabilise after initial shocks following Russia`s invasion of Ukraine in late February.

The IPO`s delay is one of the biggest fallouts in Asia`s capital markets from the Ukraine crisis as it was slated to be one of the biggest insurance IPOs globally this year.

Another senior government official said the government would also wait to see the impact of expected monetary tightening by the U.S. Federal Reserve which could adversely affect Indian stock markets, pushing away foreign investors.

The Fed is widely expected to raise interest rates by a quarter of a percentage point at the end of its two-day policy meeting on Wednesday.

"The government is also monitoring the VIX (volatility index) and wants it to be at around 15% for a week before it launches the LIC IPO," the second government source said.

Both sources declined to be named as they were not authorised to speak to media about internal government discussions.

A finance ministry spokesman declined to comment.

Deferring the LIC listing to the next financial year, which starts on April 1, will also help the government to meet its targeted fiscal deficit of 6.4% of GDP in the coming fiscal year as proceeds from the IPO boost its revenue, the first official said.

"Surely, the LIC listing in April will be a major positive for government revenue," the official said.