LIC raised ₹20,557 crore — and listed below its issue price

The Indian government fixed the price of its sale of a 3.5% stake in the Life Insurance Corporation of India at ₹949 a share — the top of the ₹902–949 band — with policyholders paying ₹889 and retail investors and employees ₹904. The ₹20,557 crore offer was India's largest ever initial share sale, and when books closed on 9 May 2022 it stood subscribed 2.95 times.

Listing day, 17 May 2022, answered the question the subscription had not: the shares opened at ₹872 on the NSE, 8.11% below the issue price, and at ₹867.20 on the BSE, 8.62% below. Analysts had been cautious into the debut — Macquarie started coverage at 'neutral' with a ₹1,000 target, flagging market-share loss and sensitivity to equity-market corrections — and the discount at listing sat below even the price paid by policyholders, the category given a ₹60 discount as their margin of safety.

The arithmetic of the debut: the seller took the full ₹20,557 crore at ₹949, while every buyer category carried an instant paper loss — ₹32 a share for retail at ₹904, ₹77 for everyone at the general price. Pricing at the top of the band in a falling market made the proceeds the only side of the trade that won.

Priced at ₹949, the top of the band, and took the full ₹20,557 crore, but the listing at ₹872 left every buyer with an instant paper loss, even policyholders.

Pricing at the top of the band during a global rout put the seller's proceeds target ahead of the listing's reception.

The ₹60 policyholder discount was designed as the margin of safety; the debut traded below even the discounted entry price.

Subscription of 2.95 times measured demand at the offer price; the 8.11% listing discount was the market's own price.

Proceeds belong to the seller; the listing price belongs to the market. When the two disagree, the gap is paid by every category that bought — including the ones given a discount.