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LIC Makes Weak Stock Market Debut, Lists At Discount Of Over 8%

LIC IPO, the country's largest IPO ever, was subscribed 2.95 times during the exceptional five-day share sale which ended on May 9

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Life Insurance Corporation of India shares opened for trading at Rs 872 on the NSE.

Life Insurance Corporation (LIC) of India made a weak stock market debut on Tuesday as the stock opened for trading at Rs 872 on the National Stock Exchange against its issue price of Rs 949, marking a decline of 8.11 per cent or Rs 77 from the issue price. On the BSE, LIC shares opened for trading at Rs 867.20, marking a decline of 8.62 per cent.

LIC IPO, the country's largest IPO ever, was subscribed 2.95 times during the exceptional five-day share sale which ended on May 9. The government sold over 22.13 crore shares or 3.5 per cent stake in LIC through the IPO at a price band of Rs 902-949 a share.

The retail investors and eligible employees of LIC were offered a discount of Rs 45 per equity share over the issue price, while policyholders got a discount of Rs 60 per share.

LIC policyholders and retail investors have got the shares at a price of Rs 889 and Rs 904 apiece, respectively.

Shares were allocated to policyholders and retail investors after applying the discount applied to them.

The share sale fetched the government around Rs 20,557 crore.

The LIC IPO was predominately lapped up by retail and institutional buyers, but foreign investor participation remained muted.

So far, the amount mobilized from the IPO of Paytm in 2021 was the largest ever at Rs 18,300 crore, followed by Coal India (2010) at nearly Rs 15,500 crore and Reliance Power (2008) at Rs 11,700 crore.

LIC had last month reduced its IPO size to 3.5 per cent from 5 per cent decided earlier due to the prevailing choppy market conditions. Even after the reduced size of over Rs 20,557 crore, LIC IPO is the biggest initial public offering ever in the country.  

The share sale was initially planned to hit the markets in March. But the uncertainty in stock markets due to the Russia-Ukraine war pushed the issue to the current fiscal which began in April.

The proceeds from the LIC issue make up for about a third of the Rs 65,000 crore disinvestment target set for the current fiscal.

As of 10:05 am, LIC shares traded at Rs 897, down 5.5 per cent from issue price.

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