LIC’s Dull Debut On D-Street

Photo by Annie Spratt on Unsplash

The country’s biggest insurer and its largest domestic financial investor, Life Insurance Corporation of India (LIC), was all set to make the biggest IPO debut in the history of D-Street.

In what was envisioned to be a record-breaking IPO listing, things took a downfall as LIC’s shares slumped in market capitalisation on Tuesday. The tepid debut on stock exchanges resulted in the erosion of over Rs 43,000 Cr of overall investor wealth!

How It Started Vs. How It’s Going

The Rs. 21,000 Cr blockbuster IPO had initially witnessed a good response from the investors. It was getting subscribed 2.95 times after a marathon 6-day subscription period from May 4-9. 

A State Of Melancholy

The stock was listed at Rs. 872 apiece on the NSE, a discount of about 8% as compared to its IPO issue price of Rs. 949 per share. On the BSE, LIC shares started trading at Rs. 867. The stock, which rose meagrely to Rs.886 apiece in early deals, however, was still trading below the issue price.

The oversubscribed IPO raised far less than expected for the government – which itself raised roughly Rs. 205 billion from selling a 3.5% stake in LIC.

Standing at a valuation of Rs 5.7 trillion., LIC is now India’s fifth-biggest company.

More Power To The State?

The offering is seen as being significant to India, meeting its ambitious target of selling off state assets. The debut performance will also set the mood for forthcoming issues after retail investors were badly burnt by India’s recent large IPOs.

Too long? Here’s a one-liner: LIC made a lacklustre debut as it launched its IPO on Tuesday; shares close at an 8% discount on listing day, with the issue oversubscribed nearly 3 times.

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