Shares of the life insurance corporation fell more than 8 per cent during its debut on the stock exchange on Tuesday, when India’s largest initial public offering took place at a turbulent time for global asset markets.

The Indian government has raised 210 billion rupees ($ 2.74 billion), selling 3.5 percent of the state’s life insurance company this month. Subscription to the offer was 2.95 times higher, which attracted anchor investors, including Norwegian and Singaporean sovereign wealth funds, as well as retail enthusiasm.

But LIC shares opened at 872 rupees compared to 949 rupees. They later recovered slightly to 874 rupees, which means a share price of 5.5 trillion rupees, or $ 71 billion.

Some analysts attribute the fall on the first day to weakness in the broader market: India’s Nifty 50 stock target fell more than 5 percent this month, which one broker who asked not to be named described it as “absolute chaos”.

“So far, this is a lack of trust in the market, not a problem with the company,” said Jignesh Shial, an analyst at InCred Capital, commenting on the fall of LIC on the first day.

Investors’ concerns about the insurer’s close relationship with the government, which has affected fundraising sentiment, have certainly been “assessed”, he argued.

The historic IPO, which surpassed last year’s Paytm listing by $ 2.5 billion and ranked the largest in India, was decreased to about half of the expected increase and detained due to market unrest following Russia’s invasion of Ukraine and the gradual lifting of pandemic-era incentives by central banks.

Hemang Jani, head of capital strategy at Motilal Oswal Financial Services, argued that the issue was a good price, but fell victim to a bad time: “When they (the government) originally came up with this plan to sell, there was a lot of interest. . . But by the time they were finally able to launch the release, general market sentiment had weakened significantly. ”

Despite a hidden debut on the stock exchanges, LIC’s entry into the market is an important moment for India’s insurance sector. LIC has held a monopoly on selling life insurance in the country for nearly 40 years, growing to manage assets of $ 495 billion, more than three times the level of all other life insurers in India, its prospectus said. “Their scale is something we can’t imagine,” the senior insurance director said when an IPO was announced in February.

But some investors are concerned about its potential for further growth as private players lose more than 60 percent of premiums in the market, as well as the risks associated with ties to the government. The LIC prospectus said that “certain measures may need to be taken to support this [government’s] economic or political goals ”.

However, Mohamed Ali Londe, a senior analyst at Moody’s, said the LIC IPO took place amid a broader trend toward reform of still-dominant state insurers.

While state-owned insurance companies have previously focused on “maximizing customers rather than profitability,” Londe said, the focus is shifting to better risk management and thus to increasing profits.