Life Insurance Corporation of India (LIC) made a weak debut on the bourses on Tuesday. The stock listed at ₹867.20 on BSE, an 8.6 percent discount from its IPO price of ₹969. On NSE as well, it listed at an 8.11 percent discount at ₹872.
At 2:02 pm, the stock was trading at a 7.2 percent discount to its issue price at ₹880 per share on the BSE. In comparison, the Sensex was up 2 percent or 1,061 points at 54,035.
The government raised ₹21,000 crore by selling 3.5 percent of its holdings in the largest initial public offering (IPO) in the history of India's primary markets.
The massive LIC IPO, which opened for subscription on May 4 and ended on May 9, was oversubscribed 2.95 times. It received bids worth ₹43,933.5 crore till May 9, the final day of bidding, which was more than double the issue size.
The offer was subscribed 2.95 times as investors put in bids for 47.82 crore equity shares against IPO size of 16.20 crore shares, as per the subscription data available on exchanges.
The government had fixed the issue price of LIC shares at ₹949 apiece for allotment to investors. LIC policyholders and retail investors have got the shares at a price of ₹889 and ₹904 apiece, respectively, after taking into account the discount offered.
LIC is the largest life insurer in India with a market share of 61.4 percent in terms of new business premium (NBP). This is around 1.59 times of the total private life insurance sector and around 6.7 times the NBP for the second-largest player in the industry.
LIC is the largest Asset Manager in India with an asset under management (AUM) of ₹40.1 lakh crore which is 1.1 times more than the AUM of the Indian mutual fund industry.
Most experts were bullish on the issue on the back of its strong legacy and robust fundamentals.
Shivam Bajaj, Founder & CEO at Avener Capital had said, "Amidst the volatile environment, the revision in the LIC IPO Valuation demonstrates the keenness of the government to deliver on the IPO. The revised IPO valuation can potentially unlock a favorable opportunity for investors for wealth creation. Being a landmark issue for the nation, LIC is expected to be pinned on global portfolio watchlists."