Home/ Markets / Ipo/  LIC, India's largest-ever IPO, comes to market at the wrong time, says KPMG

The initial public offering of Life Insurance Corporation of India (LIC) came at a time when market volatility is high and the country’s largest insurer’s business will continue to outperform with its dominant market share, according to KPMG.

“It continues to remain a very strong company in the insurance sector and has more than 70% market share in India," Srinivas Balasubramanian, senior partner and head of corporate finance at KPMG India, said in a Bloomberg Television interview on Wednesday. 

“Unfortunately it came to the market at the wrong point of time," Balasubramanian said.

The country's largest insurer LIC made a lacklustre debut on stock exchanges on Tuesday, listing at over 8% discount after a successful IPO, which fetched 20,557 crore to the exchequer.

The share sale, which was priced at the top end of its range, was well-received by local investors and LIC policyholders. 

LIC shares were up 0.4% as of 2:35 pm local time on Wednesday.

What LIC investors seek post flop debut

Disappointed by a 7.8% plunge that made for the world’s second-worst trading debut among large IPOs this year, shareholders of LIC will be counting on a bumper dividend if Prime Minister Narendra Modi’s government wants them to stay put.

With the demand for a handsome payout, LIC investors are taking a leaf out of Aramco’s playbook, when the Saudi Arabian behemoth in the world’s biggest-ever IPO assured investors of a minimum dividend of $75 billion a year until at least 2024. That partly helped Aramco’s stock soar in its 2019 debut.

While LIC has made no such promises in its offer documents, it isn’t clear if or how soon the company will bow to investors’ wishes.

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Updated: 18 May 2022, 08:57 PM IST
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