According to KPMG, Life Insurance Corporation of India’s (LIC) initial public offering comes at a time when market volatility is high and the business of the country’s largest insurer will continue to outperform with its dominant market share.
“It continues to be a very strong company in the insurance sector and has over 70% market share in India,” Srinivas Balasubramaniam, Senior Partner and Head of Corporate Finance, KPMG India, said in an interview to Bloomberg Television on Wednesday.
“Unfortunately it hit the market at the wrong time,” Balasubramaniam said.
The country’s largest insurance company LIC made a grand debut on the stock exchanges on Tuesday, listing at a discount of over 8% after a successful IPO, which was received. 20,557 crore to the exchequer.
The share sale, which was priced at the top end of its range, was well received by local investors and LIC policyholders.
LIC shares were up 0.4% as of 2:35 pm local time on Wednesday.
What LIC Investors Want After Flop Debut
Disappointed with a 7.8% drop for the world’s second-worst business debut amid big IPOs this year, LIC shareholders will count on bumper dividends if Prime Minister Narendra Modi’s government wants them to stay afloat.
With demand for a handsome payout, LIC investors are taking a leaf out of Aramco’s playbook when the Saudi Arabian giant in the world’s biggest IPO assured investors a minimum dividend of $75 billion per year until at least 2024 . That partly helped Aramco’s stock climb in early 2019.
Though LIC has not made any such promise in its offer documents, it is not clear how soon the company will succumb to the wishes of investors.