LIC's Debut Is Second-Worst Among 11 Global Companies Listed This Year: Report

LIC, which raised $2.7 billion, with buyers, including sovereign funds in Norway and Singapore, and lakhs of retail investors, saw a weak listing on the back of strong rally in Asian market on Tuesday

New Delhi: Shares of state-run insurer, Life Insurance Corporation of India (LIC), made a weak debut on the stock exchanges on Tuesday after a record initial public offering (IPO) that priced at the top of the range and at the close of subscription the issue was oversubcribed nearly three times.

The listing of the 65-year-old behemoth turned out to be the second-worst debut among 11 global companies that listed this year that managed to rake in at least $1 billion through first-time share sales, according to a report by Bloomberg.

The shares ended 7.8 per cent lower than the IPO price of Rs 949 after losing 9.4 per cent earlier. The insurer raised $2.7 billion, with buyers, including sovereign funds in Norway and Singapore, and millions of investors from the country.

Stating the reason for tepid response, the department of investment and public asset management (DIPAM) Secretary Tuhin Kanta Pandey on Tuesday said the weak debut of the country's largest insurer LIC on the bourses was due to unpredictable market conditions and asked investors to hold on to the stock for long-term value.

Second-worst debut among 11 global companies

The weak listing came on the back of strong rally in Asian market on Tuesday. The subscription witnessed enthusiasm from policyholders who got a discount of Rs 60 and bid multiple times for the shares on offer. At the closing price of Rs 875.25, the stock is now below the discounted price.

The issue remained among the the fourth-largest global IPOs priced this year. The issue comes at a time when there is lack of large-size offerings in financial hubs from New York to London and Hong Kong. In fact, there has been no listing exceeding $1 billion in Hong Kong or Europe so far this year, according to the report.

In Shanghai, ASR Microelectronics Ltd got listed on January 14 at a nearly 34 per cent discount raised a little over $1 billion.

How did LIC issue fare compared to other weak public sector listing?

LIC joined the list of a number of large public-sector firms that fell below issue price on listing. Listed in November 2017, New India Assurance Co finished its first session 9 per cent below the listing price. In fact, of the 21 state-run firms that have debuted since 2010, half of the companies are still trading below their respective IPO price, noted the report.