The listing of the Life Insurance Corporation (LIC), after its mega-initial public offering (IPO), indicates weak market sentiment. The issue was oversubscribed at Rs 949 (ignoring discounts to policyholders and employees), which was the top end of the price band. The government raised Rs 20,516 crore from the issue. But the share closed out its first trading session at Rs 873, a discount of 8 per cent to the issue price. The IPO has been plagued by consistent bad luck. The combination of the Ukraine war and tighter monetary policy to counter inflation led to the paring of the plan to sell a 5 per cent stake. Indeed, the regulator had to clear the sale of only 3.5 per cent, contrary to its norms for minimum 5 per cent divestment. Besides, the valuation was downgraded. As a result, the government has received far less than what it hoped for. This puts a crimp in the Budget estimates of a disinvestment target of Rs 65,000 crore for the current fiscal year. Unless market conditions improve, the disinvestment target would be hard to meet.
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