Department of Investment and Public Asset Management (DIPAM) secretary Tuhin Kant Pandey said on Tuesday that the weak entry of LIC, the country’s largest insurer in stocks, was due to unpredictable market conditions and advised investors to hold the stock for long-term value.
LIC listed its shares on the NSE on Tuesday, down 8.11 per cent at Rs 872 per share.
At the BSE, the shares were listed at Rs 867.20 per share, down 8.62 per cent from the issue price of Rs 949 per share.
LIC fixed the issue price of its shares at Rs 949 crore after a successful initial public offering, which brought the government to Rs 20,557 crore.
“No one can predict the market. We have been saying that it should not be for a specific day but for more than one day, “Pandey told reporters after the listing.
The sale of LIC’s shares, which took place through an offer-for-sale route, resulted in a discount of Rs 45 per equity share for retail investors and eligible employees and a discount of Rs 60 per equity share for policyholders.
LIC policyholders and retail investors received shares at Rs 889 and Rs 904, respectively, after considering the discounts offered.
Pandey said there was some protection for retail investors and policyholders who received shares at a discounted price.
Speaking at the event, LIC Chairman MR Kumar said that the reaction of shares in the secondary market is going to be high which will pull the price.
“The markets are also frozen. We didn’t expect a big jump.
“It simply came to our notice then. I am sure that many people, especially policyholders who are excluded from the allocation (in the secondary market) will raise shares. I don’t see any reason why it should be banned for so long, “MR Kumar told reporters.
The government has sold 22.13 crore shares or more than 3.5 per cent shares in LIC through IPO.
The price range for the country’s largest IPO was set at Rs 902-949 per equity share. LIC’s initial public offering was subscribed almost three times.