LIC becomes 5th largest listed firm in m-cap; bigger than top 5 insurers

The much-awaited listing of state-own insurer Life Insurance Corporation of India (LIC) received muted response from traders but this has not stopped the company from becoming the 5th biggest listed firm in terms of market capitalisation. At the time of writing the report, the LIC m-cap stood at ₹5.6 lakh crore.

The LIC share, which made its debut at over an 8% discount on the stock exchanges, eroded over ₹42,500 crore of the investor wealth in early trade. Also, its market capitalisation slipped to ₹5.57 lakh crore against the issue price of around ₹6 lakh crore.

Even with a tepid listing, LIC because of the sheer size of the IPO, become India’s fifth-largest company in terms of market capitalisation.

At the current price, LIC's current m-cap is higher than many of the industry giants like Hindustan Unilever (₹5.3 lakh crore) and ICICI Bank (₹4.9 lakh crore). However, it's behind companies like RIL (₹16.9 lakh crore), TCS (₹12.5 lakh crore), HDFC Bank (₹7.2 lakh crore), and Infosys (6.3 lakh crore).

Also, its market cap exceeds the combined m-cap of the top five listed insurance companies, including SBI Life Insurance (₹1.05 lakh crore), ICICI Prudential Life Insurance (₹72,182.65 crore), ICICI Lombard General Insurance (₹63,323 crore), Star Health and Allied Insurance Company (₹37,457 crore) and Max Financial Service (₹25,440 crore). The total m-cap of the top five listed insurers stands at ₹3.03 lakh crore, which is lesser than LIC’s m-cap of ₹5.6 lakh crore.

LIC shares admitted to dealings in the list of ''A'' group securities, listed at ₹867.20 on the Bombay Stock Exchange (BSE), down 8.6% from the upper end of the IPO price band of ₹902 to ₹949 per share. On the National Stock Exchange (NSE), the stock opened at ₹872 apiece, 8.1% lower than the issue price of ₹949. The grey market, an unofficial and unregulated market for unlisted securities, had also indicated a muted opening for LIC on the bourses.

However, the LIC shares recovered a bit post the early trade to touch an intra-day high of ₹920.

Despite poor response on stock markets, analysts are hoping LIC to recover in the near term on the back of expected buying interest from retail and institutional investors. They believe some buying activity could be seen as a large amount has been released post the listing. Some of it could be poured back into the company.

At the time of writing the report, the LIC shares were trading at ₹886.65, up 1.6% from the listing price on the NSE.

The IPO was subscribed 2.95 times and the government was able to raise ₹20,557.23 crore by selling 3.5% shares in LIC. The policyholder portion of the IPO has been subscribed 6.11 times, while the portion reserved for employees was subscribed 4.39 times. Retail investors bid 1.99 times the allocated bucket, and non-institutional investors’ portion was subscribed 2.91 times. The issue raised a ₹43,933 crore demand against the intended offer size of ₹21,000 crore.