State-run General Insurance Corp of India (GIC Re), which was 1.38 times oversubscribed earlier this month, debuted on the trading floor at 6.79% below the issue price of INR912 per share yesterday.
GIC Re's share price, which opened at INR850, reached a high of INR895 during the day. The shares closed at INR870.40.
The national reinsurer raised INR111.76 billion ($1.72 billion) in the country's biggest initial public offering in seven years.
GIC Re was fairly priced relative to its domestic rivals but was more expensive than global peers, analysts said. The reinsurer was priced at a price-to-book value of 1.5 to 1.6 times.
GIC Re's IPO was subscribed 1.38 times from 11-13 October after it was launched. The IPO received bids for 170,699,808 shares against the total issue size of 124,700,000 shares. The reinsurance company had fixed the price band at INR855-912 for its IPO.
The company proposes to utilise the IPO proceeds towards strengthening the capital base to support business growth and maintain current solvency levels.
Analysts attribute the stock performance to the newness of insurance shares to Indian retail investors, even more so the shares of a reinsurance company. This lack of familiarity could perhaps be a reason for the tepid subscription to GIC Re's IPO earlier this month and the response now to the company's listing.
The first listing of an insurance company in India took place only in September last year. This was by ICICI Prudential Life, which was followed by the listings of ICICI Lombard General Insurance and SBI Life at the end of September this year and early this month respectively.