New Delhi Shares of Life Insurance Corporation of India (LIC) fell as much as 7.8% in the market opening on Tuesday after India’s biggest initial public offering (IPO) remained on hold for weeks due to concerns about the ailing global economy.
The government broadly raised 205 billion ($2.7 billion) is far from its initial goal of bringing in $12 billion by selling a 3.5% stake in the IPO.
After missing out on last year’s IPO frenzy, shares open in India’s largest insurer 872 each, as compared to their issue price 949. He touched the high season of 918.95.
Below is a timeline of the government’s listing plans for LIC, which captures over 60% of India’s insurance market.
February 2020
The Indian government announced plans to sell part of its stake in LIC through a potential IPO to help it meet a broader $29.6 billion state asset disinvestment target for the fiscal year ending March 2021.
April 2020
LIC’s listing plans have been derailed as the COVID-19 pandemic impacts fundraising plans for several companies due to market uncertainty.
December 2020
The sale is further delayed as the government begins determining the embedded value of an insurance company for the first time, a practice that ultimately takes more than a year.
Embedded value is a measure of future cash flows in life insurance companies and is a key financial metric for insurers.
February 2021
The government says it plans to sell about 10% of its shares in LIC by the end of March 2022.
January 2022
The government sets a mid-March deadline for raising up to $12 billion through IPOs and asks regulators to expeditiously review the draft prospectus. ,
February 1, 2022
The government announced a drastic cut in its plan to sell stake in state-run companies. The proposal to lower the total disinvestment target lowers LIC IPO expectations to 5% stake sale from the earlier 10%.
February 3, 2022
The embedded price of LIC has been finalized at Rs. 5 trillion ($66.8 billion), Reuters reports. The market valuation of LIC is seen as two to three times its embedded value.
February 13, 2022
LIC files its draft IPO papers with an embedded value of 5.39 trillion.
The company management then begins to conduct virtual road shows for potential investors.
February 24, 2022
Russia’s invasion of Ukraine, in what it calls a “special military operation”, has battered global markets and prompted many foreign investors to sell holdings in emerging markets.
February 26, 2022
India’s cabinet approved policy amendment allowing foreign direct investment of up to 20% in LIC. Government officials are confident of an IPO by the end of March 2022.
1 March 2022
Bankers advising LIC pressed the government to postpone the launch of the IPO as the market was hit by the attack, Reuters reports.
Sources later confirmed that the plan to list LIC is being pushed to the next financial year starting April.
22 April 2022
New Delhi may hit its fundraising target for LIC’s IPO to around $3.9 billion after the valuation estimates were cut following investor feedback, a government source says.
April 26, 2022
India files IPO prospectus after investors questioned LIC’s growth potential, and expects to reduce the amount to about $2.7 billion from the sale of a 3.5% stake, just a third of its original estimates .
2 May 2022
LIC’s IPO opens for an anchor investor subscription which eventually enjoys strong demand and pricing at the top of the range.
4 May 2022
The IPO opens for subscriptions from retail and other investors.
17 May 2022
LIC finally debuts on the stock exchanges but falls 7.8% on the day of listing. Analysts expect investors to be in more trouble amid volatility in the market.