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Lacklustre listing for India\'s biggest-ever IPO, LIC stock hits the bourses at a discount
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Shares in Life Insurance Corp of India (LIC) slid 5% in their market debut on Tuesday, a fresh setback for the state-owned giant after its IPO, while record-breaking, raised far less for the government than initially envisioned.

At one point on Tuesday, LIC shares plunged as much as 9% before paring losses.

The country's biggest insurer and its largest domestic financial investor was trading at around Rs 900 rupees a share on Tuesday morning compared with its IPO price of Rs 949, valuing it at around Rs 5.7 trillion or $73 billion.

The share price decline is in line with a slump in the broader market since LIC's IPO opened for subscription on 4 May.

"We were not expecting on a big listing as markets were jittery, expect it to pick up," LIC's Chairman MR Kumar told reporters.

The government raised roughly Rs 20,500 crore or $2.7 billion from selling a 3.5% stake in LIC.

That compares with a fund-raising goal of around Rs 30,000 crore in April that was in turn halved from earlier expectations after investors pushed back against lofty valuation estimates. Initial government estimates had valued LIC at around Rs 17 trillion.

Prime Minister Narendra Modi's administration had positioned the sale as the first and biggest of a wave of privatisations aimed at replenishing state coffers.

"Sentiment is affected due to carnage in the broader market. Though there is some recovery today and yesterday, many stocks have corrected sharply from the recent high," Hemang Jani, senior group vice president at Motilal Oswal Financial Services.

LIC dominates India's insurance sector with more than 280 million policies. The 66-year-old company was the fifth-biggest global insurer in terms of insurance premium collection in 2020, the latest year for which statistics are available.

Investors have also been concerned that LIC's investment decisions, including those in loss-making state companies, could be influenced by government demands.

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