LIC Listing: LIC lists on NSE at Rs 872 per share at 8.11% discount
India’s biggest IPO ever, state-owned insurer Life Insurance Corporation (LIC) on Tuesday listed its shares at a discount of over 8 per cent.
Indeed, LIC is listed on BSE at Rs 867.20 per share, a discount of 8.62 per cent or Rs 81.80 from its mega initial public offering (IPO) allocation price of Rs 949.
Shares of the insurance giant were trading at Rs 904 at 10.25 am Indian Standard Time (IST), which is more than 4 per cent lower than its listing price of 867.20 and almost 5 per cent lower than its issue price of Rs 949 per share.
The listing price of LIC on NSE was Rs 872, indicating a discount of 8.11 per cent from the issue price. According to the NSE, the stock was trading at around Rs 914, up over 3.5 per cent in the past.
“However, the LIC listing has been below the issue price of Rs. 949, given the attractive valuations and stability in the markets, we expect some buying interest in the stock from both retail and spontaneous investors,” said Hemang Jani, Head of Equity Strategy, Broking and Distribution at Motilal Oswal Financial Services.
Since a huge amount of money has been released after the listing of LIC, a part of this money can be invested in equity markets,” he said.
More recently, financial markets have been grappling with concerns of a stagflationary slowdown as major central banks embark on aggressive interest rate hikes to tackle decades of high inflation.
Emerging market assets, driven by the dollar’s appeal over a general increase in flight-to-safety trades, have taken a toll on foreign capital outflows.
Despite the huge volatility in the global financial markets, LIC’s IPO received an overwhelming response. The offer was nearly three times oversubscribed, led by policyholders who bid for more than six times the shares on offer.
In fact, India’s largest ever public offering – closed with nearly 3x subscriptions, followed mainly by retail and institutional buyers, but participation from foreign investors remained muted. Market volatility delayed the IPO from March onwards and limited demand led to a cut of a third of the original target plan.
The listing comes as Indian equity benchmarks closed for the second consecutive session on Tuesday, while the rupee weakened to an all-time low. LIC had fixed the issue price of its shares at Rs 949 after a successful initial public offering, which raised Rs. 20,557 crore to the government.
Considering the discounts given to LIC policyholders and retail investors, shares have been received at a price of Rs 889 and Rs 904 respectively.
The government sold over 22.13 crore shares or 3.5 per cent stake in LIC through IPO, which is a third of its original target plan. The issue price band was Rs 902-949 per share. However, shares were allotted to investors at the upper end of the price band on May 12.