The country’s largest government insurance company LIC has a weak listing in the stock market on Tuesday (17-May-2022). LIC’s share opened at Rs 867 on BSE, which is about 8.62 per cent lower than its issue price of Rs 949 per share, while on NSE the stock was down 8.11 per cent at Rs 872. LIC’s weak listing has dashed the hopes of all investors who had expected strong returns from LIC.
On LIC’s weak listing, Ravi Singh, Vice President and Research Head, Share India Securities, says, “The volatility in the current market has resulted in LIC’s weak listing. However, the future of the insurance sector is very bright in India and investors should hold it for at least 3 to 5 years to get good returns in LIC.”
On the listing of LIC, Hemang Jani of Motilal Oswal Financial Services says, “The listing of LIC has weakened due to volatility in the market. As soon as the markets stabilize, there may be buying from retail investors and large institutional investors.
Country’s largest IPO: LIC’s IPO was the largest IPO in the country. Its size was about Rs 21 thousand crores, LIC being a trusted brand, investors also invested a lot of money. Its issue was subscribed 2.95 times and the IPO was open for investors from May 4 to May 9.
Retail and policy holders got discount: The issue price for LIC IPO was fixed at Rs 949 by the government, but retail and policy holders were offered discounts of Rs 45 and Rs 60 per share.
Reduced IPO size: According to the draft paper submitted by the government to the market regulator SEBI, the government wanted to sell about 5 per cent of LIC, but due to Russia-Ukraine war and due to rising inflation, the government in the midst of volatility in the stock market decided to sell only 3.5 shares.