MUMBAI: Millions of Indians investing in the country’s biggest listing could turn sour on the equity market if the stock follows the poor performance of its state-run predecessors.

Prime Minister Narendra Modi’s government raised US$2.7bil by selling shares in Life Insurance Corp (LIC) of India, including to millions of families nationwide that hold LIC policies.

The stock starts trading tomorrow at a time when markets worldwide are being roiled by the fallout of Russia’s invasion of Ukraine and rising interest rates.

While deep-pocketed global funds can withstand volatility, small investors - especially first-time shareholders such as the ones created by by LIC’s listing - risk being burned if the stock underperforms.

Of the 21 Indian state-run companies that debuted in the stock market since 2010, half are still trading below their issue price.

“The mood could turn sour if the market price falls,” said Amitabh Dubey, a political analyst at research company TS Lombard. “The government could face criticism.”

Headquartered in Mumbai, LIC is a household name in India, with 2,000 branches, more than 100,000 employees and 286 million policies.

The 65-year-old firm has almost US$500bil in assets, 250 million policy holders and makes up almost two-thirds of the market.

 - Bloomberg