Last-bencher LIC? Scrip is among Asia’s top-losing IPOs in 2022

An eye-popping $17 billion wipe-out in market value has made Life Insurance Corp of India one of the biggest wealth destroyers among Asia’s initial public offerings this year.

Having plunged 29 per cent since its May 17 debut, India’s biggest ever IPO now ranks second in terms of market capitalization loss since listing, according to data compiled by Bloomberg. The drop puts it just behind South Korea’s LG Energy Solution Ltd., which saw a more than 30 per cent peak-to-trough decline in its share price after an initial spike on debut.

Biggest new stock failure

Almost a month after listing, LIC’s $2.7 billion IPO has turned out to be one of Asia’s biggest new stock flops this year, as rising interest rates and inflation levels globally hurt demand for share sales and with India’s stock market facing unprecedented selling pressure by foreigners, reports Mint. The benchmark S&P BSE Sensex is down more than 9 per cent this year.

Also read: From valuation to quotas to timing, all that’s wrong with the LIC IPO

LIC’s shares are poised to fall for a 10th consecutive session, slipping as much as 5.6 per cent on Monday after a mandatory lock-up period for anchor investors ended on Friday. The shares of LIC reached a new record low of Rs 682 in opening trades on the BSE.

A 4% drop in trading

In the first few minutes of trading, the LIC shares dropped 4 per cent. The rout has worried India’s government, with officials saying the company’s management will “look into all these aspects and will raise shareholders’ value.”

LIC’s long-delayed IPO was part of Prime Minister Narendra Modi’s plans to expand the nation’s capital markets. The share sale, which was oversubscribed by nearly three times, was aimed at narrowing the government’s budget deficit after spending increased during the pandemic.