A year after the listing of insurance giant Life Insurance Corporation (LIC) of India, investors are licking their wounds. The mega-issue illustrates many things that can go wrong with an initial public offering (IPO). The February 2022 draft red herring prospectus stated the government’s intention of selling a 5 per cent stake (the minimum according to regulations). This would have been 316 million shares, with investors assuming a prospective valuation of about Rs 2,500 per share. The money would go straight to government coffers. But the Ukraine war started in late February and, combined with a spike in inflation, it led to a downturn in market sentiment. The IPO was pared down — to sale of a 3.5 per cent stake — at a disappointing valuation of Rs 949. The market regulator had to make a special dispensation for this sale.