The country's largest insurer LIC on Tuesday made a lacklustre debut on stock exchanges on Tuesday, listing at over 8 per cent discount after a successful initial public offering (IPO) which fetched Rs 20,557 crore to the exchequer.

As against the issue price of Rs 949, shares of LIC listed at Rs 872, a discount of Rs 81.80 apiece, on the BSE. The stock listed at Rs 867.20, showing a discount of Rs 77 apiece, on the NSE.

The listing price was also below the price at which shares were allotted to LIC policyholders, employees and retail investors.

The scrip remained below the issue price throughout the trading hours and closed at Rs 873 on NSE and Rs 875.45 on BSE.

In the intra-day trade, the shares had touched a low of Rs 860 apiece.

Over 4.87 crore shares changed hands on the NSE, while on BSE it was over 27.52 lakh.

With the listing, LIC got into the list of top-5 most valued companies with market capitalisation of nearly Rs 5.54 lakh crore.

LIC shares listed at a discount even as the benchmark BSE Sensex opened in positive zone and closed with a gain of over 2 per cent over previous close.

Life Insurance Corporation (LIC) had fixed the issue price of its shares at Rs 949 apiece after a successful initial public offering, which was over subscribed nearly 3-times when it closed on May 9. The shares were lapped up mainly by retail and domestic investors, even as foreign investor demand was muted.

LIC policyholders and retail investors have got the shares at a price of Rs 889 and Rs 904 apiece, respectively, after taking into account the discount offered.

The government sold over 22.13 crore shares or 3.5 per cent stake in LIC through the IPO.

Talking to reporters here after the listing, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said the weak debut on the bourses was due to unpredictable market conditions and suggested investors to hold on to the stock for long-term value.

LIC Chairman M R Kumar said: "It (stock price) will pick up as we go along. I am sure a lot of people, especially the policyholders who have missed out on the allotment will pick up the shares (in the secondary market). I don't see any reason why it should be tepid for too long".

Market experts too suggested that investors should hold on to the shares and the scrip will see an uptick in the long term.

Axis Securities MD & CEO B Gopkumar said investors should not look to exit at current levels and hold the stock from a medium to long-term perspective.

"We believe LIC continues to be a solid bet in the long run as it is a play on the growth story of the under-penetrated life insurance industry. Its sustained market leadership position, robust pan-India distribution network, and shifting focus towards profitable products, thus supporting margins and improving persistency ratios, will collectively make LIC an attractive pick from a long-term perspective," Gopkumar said.

Geojit Financial Services Head of Research Vinod Nair said LIC is a decent investment opportunity in the short to medium-term considering its strong market presence, improvement in future profitability due to the changes in surplus distribution norms and strong sector growth outlook.

Funds India CEO Girirajan Murugan said once the dust settles on the market due to the ongoing issues related to Ukraine- Russia war and the worries on the Inflation front, stocks in the insurance sector along with other beaten down stocks in the Banking/ NBFC space should see good momentum.

"There may be a bit of retail selling today due to the current sentiments in the overall market, but the long term fundamentals of LIC remain intact," Murugan said.

Swastika Investmart Head of Research Santosh Meena said new investors can take advantage of the dips to accumulate this share for the long term.

"LIC didn't pay any dividends in the last financial year, so there are high chances that the company might declare a good dividend this year, thus making it a good dividend play," Meena said.