Modi government calls LIC's poor IPO a 'temporary blip'

IT started well but the story seemed to lose its longevity fast. The Life Insurance Corporation’s (LIC) public offer started with a lot of fanfare but barring the joy over the subscription, the iconic insurance company’s journey has been ordinary so far.

According to a report by India’s NDTV, India’s biggest initial public offering (IPO) got an overwhelming response with an oversubscription and that remained to be the only bright part of the what is called the “LIC 2.0” story.

On Friday (10), LIC’s shares extended their fall and closed at Rupees 709.70, down by more than 25 per cent from the issue price of Rs 949.

The stock fell 1.7 per cent to reach a record closing low and also touched a record intraday low of Rs 708.70 on the Bombay Stock Exchange index, the report added.

The Indian government said on the same day that it is “concerned” and the insurer’s management will look into these aspects. It, however, called it a "temporary blip".

“We are very concerned about the temporary blip in LIC share price. People will take time to understand (the fundamentals of) LIC. LIC management will look into all these aspects and raise the shareholders’ value,” DIPAM (department of investment and public asset management) secretary Tuhin Kanta Pandey was quoted as saying.

On May 17, LIC shares were listed on the stock exchanges at a discount of Rs 872.