Life insurance corporation (LIC) of India shares listed at Rs 867, an 8.6% discount to its offer price of Rs 949 and closed the maiden trading day on the bourses at Rs 875 - down nearly 8% from its Initial Public Offer (IPO) price. At the close of the session, shareholders in LIC lost about Rs 465 billion with the company’s market capitalisation now at Rs 5500 billion, compared to about £60 billion going by its IPO price.
The majority government-owned life insurer is now the fifth most valued company in India, behind RIL, TCS, HDFC Bank and Infosys, but ahead of giants like HUL, ICICI Bank and SBI, data from the BSE (Bombay Stock Exchange) showed.
In the run-up to LIC’s listing, the premium in the unofficial grey market had vanished, which had indicated a muted debut for the life insurer. After the listing, LIC’s policyholders who got the shares at Rs 889 and retail investors who were allotted at Rs 904 saw marginal losses. Other shareholders were allotted the shares at Rs 949.
On May 9, LIC had closed its £2.1 billion IPO with a subscription figure of nearly three times. Its policyholders and retail shareholders led the subscription figures, along with some strong support from local institutions. Through the offer, the government sold 3. 5% of its stake, or about 220 million shares of the life insurer.
