LIC makes stock market debut, 2nd worst debutant despite record IPO

Life Insurance Corporation of India is among the worst debutants this year after a record IPO. It plunged nearly 8% on its market debut on Tuesday despite the country's largest ever IPO being oversubscribed nearly three times at the top of the price range.

According to a Bloomberg report, this makes for the second-worst debut among 11 global companies that listed this year after raising at least $1 billion through first-time share sales.

On its market debut, as against the issue price of Rs 949, shares of LIC listed at Rs 872, a discount of Rs 81.80 apiece, on the BSE. On the NSE, the stock listed at Rs 867.20, showing a discount of Rs 77 apiece.

At the issue price of Rs 949, the market capitalization of LIC stood at Rs 6,00,242 crores. At the listing price, the market capitalisation of LIC dipped to Rs 5,57,675 crores, resulting in a loss of around Rs 42,500 crore.

The weak debut came even as stocks in India and the broader Asian market rallied on Tuesday.

However, experts see in this a commentary on the current state of global markets, rather than the company itself.

Despite the debut plunge, according to the Bloomeberg report, the offering raised $2.7 billion, with buyers including sovereign funds in Norway and Singapore, and millions of small-time Indian investors.

Nonetheless, the poor listing has let down millions of small-time investors who bid enthusiastically for the issue because of their long and emotional association with the insurer and its products. PM Modi had had gone ahead with the IPO despite a slowdown in global fundraising owing to the war in Ukraine. Funds from the IPO are key to boosting government finances and meeting a budget deficit targets.