(Bloomberg) -- State-run insurer Life Insurance Corporation of India plunged early in its Mumbai trading debut after a record initial public offering that priced at the top of the range and was oversubscribed nearly three times.

The shares fell as much as 9.4% to 860 rupees in Mumbai, versus their IPO price of 949, before paring about half of the losses. The offering raised $2.7 billion, with buyers including sovereign funds in Norway and Singapore to millions of small-time Indian investors.

The sale of equity in the 65-year-old behemoth, which is synonymous with insurance in India, was oversubscribed nearly three times, riding on the enthusiasm of policyholders who received a 60-rupee discount and bid multiple times for the shares on offer.

READ: Faith of Millions of Small Investors Put to Test With LIC Debut

A poor listing is set to disappoint millions of small-time investors who bid enthusiastically for the issue because of their long and emotional association with LIC and its products.

Prime Minister Narendra Modi’s government decided to push ahead with the IPO despite a slowdown in global fundraising as the war in Ukraine and rising interest rates stoked volatility and sapped investor appetite for equities. Funds from the IPO are critical to bolstering government finances and meeting a budget deficit goal.

LIC’s is the fourth-largest deal among global IPOs priced this year. It comes when there is a dearth of large-size offerings in financial hubs from New York to London and Hong Kong. There hasn’t been any listing exceeding $1 billion in Hong Kong or Europe so far this year.

The S&P BSE IPO Index, a gauge tracking the performance of Indian shares for the first two years after listing, has fallen about 25% so far in 2022 after nearly tripling in the previous three years.

The weak start also brings back memories of market debuts by a number of large public-sector companies that fell below issue price on listing. New India Assurance Co., listed in November 2017, finished its first session 9% below the listing price. In fact, of the 21 state-run firms that have debuted since 2010, half are still trading below their respective IPO price.

READ: Foreigners Make a Last Minute Dash for India’s Biggest IPO (1)

Macquarie Capital Securities (India) Pvt. started coverage of LIC’s stock with a neutral rating and a price target of 1,000 rupees.

“The call here is whether LIC will be able to diversify the product mix in favor of high margin non-par products,” analysts led by Suresh Ganapathy wrote in a report Tuesday, noting that the insurer has lost market share in individual business over the past several years due to lack of a “diversified product portfolio and excessive focus on single premium and group business.”

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