LIC shares list at a discount
Life Insurance Corporation of India made a tepid debut on stock exchanges, listing at Rs
867.20 per equity share on the BSE and at Rs 872 on the NSE, a discount of 8.61 per cent on the public issue price of Rs 949.
LIC shares traded with a discount in the first day's trading touching a low of Rs 860 and a high of Rs 920 on the BSE. The stock finally closed at Rs 875.45 on the BSE, down by 7.75 per cent and at Rs 875.25 on the NSE.
However, LIC created history by becoming the biggest company, by market capitalisation, to debut on Indian bourses. LIC's market cap at on the BSE stood at Rs 5,53,721.92 crore on Tuesday. LIC is now the fifth most valuable company in the country, trailing only Reliance Industries (Rs 17.12lakh crore), Tata Consultancy Services (Rs
12.67 lakh crore), HDFC Bank (Rs 7.29 lakh crore) and Infosys (Rs 6.38 lakh crore).
It was a historic day for the capital market as LIC's initial public offering had generated huge interest and buzz among the retail investors, LIC policy holders and employees.
Detailing many new milestones created by LIC IPO, Tuhin Kanta Pandey, secretary, Department of Investment and Public Asset Management (Dipam), speaking at the listing ceremony organised at BSE's erstwhile
trading ring said, "Over 10 lakh first time investors applied for LIC IPO which received over 73 lakh applications, largest ever demand for an IPO in India. In total over 52.8 lakh investors were allotted shares."
Pandey attributed the insurance behemoth's weak debut on the bourses to the unpredictable market conditions and advised investors to hold on to the stock for long-term value. "Nobody can predict the market. We have been saying that it should not be held for a particular day but for more than a day," Pandey told reporters after the listing of shares.
Highlighting the preparedness of the whole IPO team of merchant bankers and registrar managing the issue Pandey said," The allotment process took just two hours and we also refunded the remaining bid amount in the bank account of investors in record time."
"Over 50 lakh new demat accounts have been opened
since November 21," Pandey said.
Talking about the LIC's IPO journey since it was announced by the Union Finance Minister Nirmala Sitharaman in Union Budget for FY 20-21 and required a lot of changes including amendments to the Life Insurance Corporation (LIC) Act, 1956 in Parliament Pandey said, "LIC headquarters is just 5 minutes away from BSE's historic building but it took 65 years to list on BSE.
Speaking at the listing ceremony M. R. Kumar, chairperson, LIC said, "It's a historic day for all LICians. It's an atma nirbhar moment, it's also LIC moment."
Brokerages remained bullish on LIC given its market share in the Indian insurance industry and potential to grow in the under penetrated life insurance sector.
"We believe that LIC is a decent investment opportunity in the short to medium-term.” said Vinod Nair, head of research, Geojit Financial Services."