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India’s biggest IPO of all time ranks second in terms of loss of market capitalization since listing, after a 29% drop since the beginning of May 17, according to data compiled by Bloomberg. The drop puts it just behind South Korea’s LG Energy Solutions Ltd., which saw its share price drop more than 30% for the first time since its initial spike.
About a month after listing, LICIts $2.7 billion IPO has become one of Asia’s biggest new stock flops this year, as rising interest rates and inflation levels hit demand for share sales globally. Share Market Unprecedented sales pressure is being faced by foreigners. The benchmark S&P BSE Sensex is down over 9% this year.
Shares of LIC are set to fall for the 10th consecutive session after the mandatory lock-up period for anchor investors that ended on Friday, slipped up to 5.6% on Monday. The route has worried India’s government, with officials saying the company’s management will “look into all these aspects and enhance shareholders’ value.”
bloombergLIC’s long-delayed IPO was dubbed India’s “Aramco moment” with reference to the Gulf oil giant Saudi Arabia oil The company’s $29.4 billion listing in 2019, the world’s largest. This was part of Prime Minister Narendra Modi’s plans to expand the country’s capital markets. The share sale, which was oversubscribed by nearly three times, was aimed at bridging the government’s budget deficit following an increase in spending during the pandemic. According to Avinash Gorakshakar, head of research, discount brokerage Profitmart Securities Pvt Ltd, there could be further pain for the stock given the weak quarterly results. “Management’s communication with investors is confusing. They haven’t done an analyst call after the results,” he said. “So there’s no clarity on how the company plans to grow, what its strategy is going to be.”
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