With a $17 billion loss in market value, Life Insurance Corp (LIC) of India was one of Asia’s IPOs that did the most damage to investors’ wealth this year.
According to data from Bloomberg, India’s largest-ever initial public offering (IPO) has lost 29 percent of its market value since its debut on May 17. This puts it in second place in terms of market value loss since listing. The drop puts it right behind LG Energy Solution Ltd. of South Korea, whose share price fell more than 30% from its highest point to its lowest point after a big start.
This year, LIC’s $2.7 billion IPO turned out to be one of Asia’s worst new stock disasters. Rising interest rates and inflation around the world hurt demand for share sales, and foreign investors sold more shares than ever on India’s stock market. This year, the benchmark S&P BSE Sensex has dropped more than 9%.
After a lock-up period for anchor investors ended on Friday, LIC’s stock is likely to drop for the tenth day in a row, by as much as 5.6% on Monday. India’s government is worried about the drop, and officials have said that the company’s management will “look at all of these areas and increase shareholder value.”
People called LIC’s long-delayed IPO “India’s Aramco moment,” referring to Saudi Arabian Oil Co.’s $29.4 billion IPO in 2019. It was part of Prime Minister Narendra Modi’s plan to make the capital markets in the country more open. The goal of the share sale, which was almost three times oversubscribed, was to cut down on the government’s budget deficit, which had grown because of the pandemic and the rise in spending.