Indian Insurance Giant Slumps After Country's Biggest-ever IPO

Mumbai, (UrduPoint / Pakistan Point News - 17th May, 2022 ) :Indian state-owned insurance giant LIC slumped on its market debut Tuesday following the country's biggest-ever initial public offering, opening seven percent below the offer price.

Prime Minister Narendra Modi's government raised $2.7 billion by selling 3.5 percent of Life Insurance Corporation of India as his administration seeks to privatise state assets to plug a gaping budget deficit.

But it was forced to cut back the offer from a planned five percent after markets turned volatile following Russia's invasion of Ukraine and China's Covid lockdowns.

The offer price of 949 rupees had valued LIC at $77 billion, but it opened Tuesday on Mumbai's exchange trading seven percent lower.

The share price dropped to 9.4 percent down, before recovering slightly.

The muted debut could test the appetite of new shareholders for further flotations of nationalised companies as Modi seeks to sell off state assets to plug an estimated 16.6 trillion rupee ($213.5 billion) fiscal deficit.

The IPO saw enthusiastic participation from small investors and was oversubscribed nearly three times during the six-day application period.

But foreign investors have withdrawn a net 1.71 trillion rupees ($22 billion) from Indian equities so far this year, stock exchange data showed, as the US monetary policy tightening further roiled sentiment.