A subpar record

LIC's valuation is likely to remain compressed

Business Standard Editorial Comment
Life Insurance Corporation

Listen to This Article

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.
The stock listed at Rs 873, a discount of 8 per cent to the IPO price. The issue raised Rs 20,560 crore, which made it the

Also Read

Life insurers' new biz premium growth eases to 10% as LIC loses pace

New tax norm to hurt insurers; stocks attractive for the long run: Analysts

LIC extends losing streak to 7th straight session, hits record low

Centre appoints Siddhartha Mohanty as chairman of LIC till June 2024

LIC aims to reach a mix of 75:25 between par and non-par in individual biz

Curbing defence imports

Safe farming

Pakistan's destiny

Underwhelming performance

Letter and spirit

First Published: May 17 2023 | 10:01 PM IST

Explore News

To read the full story, subscribe to BS Premium now, at just Rs 249/ month.

Key stories on are available only to BS Premium subscribers. Already a BS Premium subscriber?LOGIN NOW

Register to