LIC IPO Becomes One Of The Biggest Wealth Destroyers In India: Upto $17 Billion Wiped Off

Life Insurance Corp of India is now one of the biggest wealth destroyers among Asia’s initial public offerings this year.

There has been a whopping $17 billion wipeout in the market value of the company. 

LIC Becomes Second Biggest  Wealth Destroyer

At the beginning of June, we reported that the life insurer’s share has lost 10.23 percent since listing on 17 May 2022.

And now, the company has sunk 29% since its May 17 debut. It is now second in terms of market capitalization loss. It comes in second after South Korea’s LG Energy Solution Ltd., which recorded a 30% peak-to-trough decline in its share price after an initial spike.

As per analysts, the weaker global sentiment due to rising oil prices coupled with a rising interest rate scenario and muted Q4FY22 earnings expectations have led to selling pressure on majority of the stocks including LIC. 

LIC’s investors in the period have lost almost Rs 1.3 lakh crore of their wealth, led by its share decline, leading to a loss in its market capitalization.

LIC To Sink More?

Additionally, after a mandated lock-up period for anchor investors ended Friday, LIC’s shares are projected to tumble for the tenth consecutive session, sliding as high as 5.6 percent Monday.

The Indian government held 100% stake in the insurer and through the IPO, it planned to sell 3.5% of its stake held. The Centre was willing to generate about Rs 21,000 crore at the upper end of the price band.

The entire IPO was an offer-for-sale or OFS, wherein the Govt was to sell 221,374,920 equity shares of the company.

Of these shares put up for sale, up to 15.81 lakh shares were reserved for the employees of the insurer and 22,137,492 shares were reserved for its policyholders.

It is to be noted that LIC had offered a discount of Rs 60 to its eligible policyholders, and a Rs 45 discount was to be given to employees and retail investors.

After a mandated lock-up period for anchor investors ended Friday, LIC’s shares are projected to tumble for the tenth consecutive session, sliding as high as 5.6 percent Monday.