LIC marks market debut after a record-breaking IPO, lists at 8% discount

|HT|

India’s insurance behemoth - the Life Insurance Corporation or LIC - has made a muted market debut after a record-breaking IPO last week. The insurance giant listed at 8.11 per cent discount at ₹872 per share on the National Stock Exchange over the issue price of ₹949. Last week, by selling about 3.5 per cent stake - at the top of the range - of the country’s top insurer, the government has raised $2.7 billion or ₹20,557 crore. But volatility in the global market has arguably cast a shadow on the Dalal Street debut, according to analysts. Speculation was rife that the market debut of the insurance giant was likely to be lacklustre. And analysts were not wrong. The shares were trading at ₹872 in pre-open trade compared to the offer price of ₹949. LIC policyholders and retail investors had got the shares at a price of ₹889 and ₹904 apiece. While employees and investors have got a discount of ₹45 rupees per share, policyholders have been given a discount of ₹60 per share. Over 22.13 crore shares have been sold by the government with the IPO. While foreign investment participation has been largely amiss, the IPO was said to have been lapped up by retail and institutional buyers - it closed with nearly 3 times subscription. The LIC IPO - the country’s largest till date - was described as ‘India’s Aramco moment’ by many. Saudi Arabia’s state-oil giant Aramco raised $25 billion in 2019 in the world’s biggest IPO, surpassing Alibaba’s record. The latest Ernst and Young report has said that the Indian IPO market witnessed a significant slowdown this year in the first quarter. Geopolitical tensions, stock market volatility, a price correction in overvalued stocks from recent IPOs, plus concerns about rising commodity and energy prices, and slower economic growth are believed to be factors behind the slowdown. The LIC shares will be listed on the Bombay Stock Exchange and the National Stock Exchange. So far, the amount mobilised from the Paytm IPO in 2021 was the largest ever at ₹18,300 crore, followed by Coal India (2010) at nearly ₹15,500 crore and Reliance Power (2008) at ₹11,700 crore. The share sale was earlier expected in March but was delayed amid the Ukraine war.

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