The Life Insurance Corporation of India (LIC) is all set to start its stock market journey on Tuesday, May 17. The biggest public issue of India, received an overwhelming response from the investors during its subscription period. LIC IPO was subscribed 2.95 times over the 16.20 crore shares that were on offer. Moreover, the portion set aside for the policyholiders of LIC, was booked 6.12 times. However, LIC IPO is listing at a time when stock market is extremely volatile and the central bank is rising interest rates to tame surging inflation.
So if you have received the share of LIC, here is a listing day strategy to follow
What LIC IPO GMP Suggests
The grey market premium of LIC IPO has improved on Monday. LIC shares were trading at a discount of Rs 12 apiece in the unofficial market, according to IPO Watch. LIC unlisted share was trading at discount of Rs 15-20 apiece during the weekend. The negative grey market premium indicates that LIC stock will likely to have a moderate to discounted listing on May 17.
LIC Policyholders: What Analysts Say about LIC Listing
Market observers and analysts expect a tepid listing for LIC. The current sell-offs in the domestic and global equity market, geopolitical worries after the Russia’s invasion of Ukraine, increased inflation numbers have dampened euphoria around the listing of mega LIC IPO. “We expect LIC listing between 7 per cent discount to 3 per cent premium,” said Ravi Singhal, vice chairman, GCL Securities.
“Investors should approach listing day with no extreme expectations on either side,” said Narendra Solanki, head fundamental research- investment services, Anand Rathi.
The price band for LIC IPO was fixed at Rs 902-949 per share. The government reserved 10 per cent of the issue size for the LIC policyholders. They were eligible for a discount of Rs 60, while employees and retail investors got a discount of Rs 45. “For retail and policyholders even a flat listing could be remunerative due to inherent discount embedded in the IPO,” Solanki added.
LIC Listing on May 17: What Policyholders Should Do on Listing Day
“LIC offer was never been considered as listing gain candidate rather it should be looked at only long term. Given the market sentiments still alarming and volatile following the global headlines, LIC may also trade in muted mood hence we advise allotted investors not to panic and hold it for medium to long term,” said Prashanth Tapse, VP (Research), Mehta Equities Ltd.
If it is possible, LIC policyholders should hold share for long term as valuations are comparatively attractive for the company, Solanki suggested.