The title of Indian insurance giant Life Insurance Corporation (LIC) plunged 7% on Tuesday on the first day of its listing, compared to its IPO price at 949 rupees, the largest ever in India.
The long-awaited IPO, delayed since March due to market volatility, marks a crucial step in Prime Minister Narendra Modi’s drive to ‘monetize and modernise’ state-owned enterprises and close an estimated 16′ budget gap. 600 billion rupees (213.9 billion francs).
The government raised $2.7 billion with the sale of its 3.5% stake in LIC. This share was to be 5% initially, but the lack of investor appetite, in unfavorable market conditions, led to it being reduced considerably.
army of agents
Created in 1956 by the nationalization and merger of 245 insurance and provident companies, LIC still holds 61% of this market despite tough competition since the 2000s. The insurer continues to dominate with its 1.3 strong army million “LIC agents” covering urban and rural areas of India.
LIC manages the equivalent of 39.55 trillion rupees (483 billion euros) of assets, with significant holdings in leading companies like Reliance, TCS, Infosys and ITC which also make the insurer the one of India’s largest institutional investors.
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