Shares in LIC listed at a seven percent discount from its offer price of Rs 949, before climbing slightly—though it remained well below the flotation price. (Credits: Indranil MUKHERJEE / AFPM
umbai, India: India's biggest-ever IPO, state-owned insurance giant LIC, fell seven percent from its flotation price of Rs 949 when it made its market debut Tuesday.
The government raised $2.7 billion from the sale of 3.5 percent of its stake in Life Insurance Corporation of India as it seeks to fix tattered public finances.
The flotation, delayed from March due to market volatility and cut back in the face of limited demand, was oversubscribed nearly three times during the six-day application period.
The muted debut could test the patience of new shareholders as Prime Minister Narendra Modi
seeks to sell off state assets to "monetise and modernise" nationalised companies and plug an estimated Rs 16.6 trillion ($213.5 billion) fiscal deficit.
Shares in LIC
listed at a seven percent discount from its offer price of Rs 949, before climbing slightly—though it remained well below the flotation price.
Founded in 1956 by nationalising and combining more than 240 firms, LIC was for decades synonymous with life insurance
in post-independence India, until the entry of private companies in 2000.
It continues to lead the pack with a 61 percent share of the market in India, with its army of 1.3 million "LIC agents" giving it huge reach, particularly in remote rural areas.
But LIC's market share
has declined steadily in the face of competition from net-savvy private insurers offering specialised products.
© Agence France-Presse