May23 , 2022

LIC IPO Latest GMP Today; Know What It Indicates About Listing Gains

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LIC IPO: Subscription for the public issue of the insurance behemoth ended on May 9 and bidders are eagerly waiting for the announcement of share allotment now. LIC IPO allotment date is most likely on May 12, 2022. However, LIC IPO GMP (grey market premium) has been continuously correcting for nearly one week. According to market observers, LIC shares are quoting at a discount of Rs 8 in the grey market today.

LIC IPO GMP – What Does it Indicate?

Market observers said that due to weak sentiments at secondary markets, LIC IPO grey market premium (GMP) has been nosediving for near one week and now it has slipped into red zone. They said that LIC IPO GMP today is minus Rs 8, Rs 33 lower from its yesterday’s grey market premium of Rs 25. They said that ahead of LIC IPO subscription opening date, LIC IPO GMP surged up to Rs 92. However, it started falling from there onwards as market sentiment across global markets became negative.

Dealers tracking the grey market said lower participation from big investors and muted market sentiments are hammering LIC’s listing prospects.

Market observers said that LIC IPO GMP today is minus Rs 8, which means grey market is expecting that LIC IPO listing may take place around Rs 941 ( Rs 949 – Rs 8). So, grey market is trying to signal that the LIC IPO may have a moderate to discounted listing.

LIC IPO was overall subscribed 2.95 times. The portion for policyholders was subscribed 6.12 times, followed by 4.4 times bidding for employee quota. HNI and QIB quotas were subscribed over 2 times, while the retail portion failed to fetch double the bids over allocation. Investors made bids for roughly Rs 60,000 crore for the Rs 20,557 crore issue, which was quite less than what the Street was expecting. Due to this dull bidding, the insurance behemoth slipped in the grey market.

The company sold its shares in the range of Rs 902-949 apiece, with a discount of Rs 60 per share to the eligible policyholders and Rs 45 per share to retail bidders and eligible employees of the company.

B Gopkumar, MD & CEO, Axis Securities said the LIC IPO received phenomenal participation from retail investors, as anticipated, thanks to the better discounts offered to the investors falling in these categories.

“We have seen this IPO acting as a stimulus in driving retail participation in equity markets,” he added.

“We continue to believe that the LIC will be a good long-term bet and will play well on the growth story of the underpenetrated insurance industry.”

The government, which raised Rs 20,500 crore from the sale of 3.5 per cent of its stake in the country’s largest insurer, said that the issue was an example of ‘Atmanirbhar Bharat’ (self-reliant India) and the issue saw interest from a cross section of investors. Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey termed the response to the IPO as “tremendous”, adding that the issue saw good participation from all categories of investors.

LIC was formed by merging and nationalising 245 private life insurance companies on September 1, 1956, with an initial capital of Rs 5 crore. Its product portfolio comprises 32 individual plans (16 participating and 16 non-participating) and seven individual optional rider benefits. The insurer’s group product portfolio comprises 11 group products.

Most likely LIC IPO listing date is May 17, 2022.

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