Priced right, LIC IPO may be a good buy

The numbers are big and impressive, but the fate of India’s biggest ever listing hinges on its owner pricing the issue just so.

On the very first trading day after the government filed the draft IPO prospectus for Life Insurance Corp. of India, the Sensex plunged 1,747 points, or 3%. It looked like an ominous start for what is slated to be the country’s biggest ever initial public offering. 

Shares of One 97 Communications, which operates Paytm, fared worse. The digital payments company, whose record for India’s biggest public offer is set to be broken by LIC, saw its share price dip over 4% to Rs 863.50. It had listed at a price of Rs 2,150 a share in November 2021. 

With the global market choppy and uncertainty mounting on factors such as the rising price of crude oil and the Russia-Ukraine stand-off, does it mean LIC’s IPO faces a similar fate?

While profitable and asset-heavy LIC is certainly no Paytm, there is a chance that its issue may not catch the fancy of investors, given the current conditions. In the last one month, the equity markets have been especially volatile

Author

Ashwin Manikandan

Ashwin writes on fintech and banking at The Morning Context. He joins us from The Economic Times, he worked across the finance, tech and startup verticals, breaking stories related to India’s banking system, startups in the new economy, digital payments, insurance and cryptocurrencies.

Writer

ashwin@mailtmc.com

Delhi

Author

Prince M. Thomas

Prince leads coverage for our Business section at The Morning Context. A fascination with the written word has taken Prince to some of the leading newsrooms across the country, including The Economic Times, Dow Jones Newswires, Forbes India and Moneycontrol. In a career spanning over 18 years, Prince has led teams, managed pages, projects and special editions, and has authored The Consolidators, published by Penguin Random House in 2017.

Editor, Business

prince@mailtmc.com

Mumbai