LIC IPO (Initial Public Offering) opened for subscription on 4th May 2022 and bidding for the public offer of insurance behemoth is going to end on 9th May 2022 ie today. After 5 days of bidding, LIC IPO subscription status suggest that the public issue has been subscribed 1.79 times whereas its retail portion has been subscribed 1.59 times. The LIC IPO has been subscribed 5.04 times in policyholder category while its employees portion has been subscribed 3.79 times.
However, weak market sentiment is continuously taking its tall on LIC share price in gray market. According to market observers, shares of LIC are available at a premium of ₹36 in gray market today.
LIC IPO GMP
Market observers said that LIC IPO GMP today is ₹36, which is ₹24 lower from its yesterday’s gray market premium (GMP) of ₹60. They said that after scaling up to ₹92 levels, LIC IPO GMP has been continuously decreasing because of the weak stock market sentiments. They said that the secondary market across the world is facing sell-off and the Indian stock market is not immune to it. So, gray market was bound to get affected by the global market sentiments.
What this GMP mean
As per the market observers, LIC IPO GMP today is ₹36, which means gray market is expecting LIC IPO listing around ₹985 levels ( ₹949 + ₹36), which is around 3 per cent higher from LIC IPO price band of ₹902 to ₹949 per equity share.
However, stock market experts said that gray market premium is an unofficial data and it has nothing to do with the financials of LIC. They advised bidders to look at the balance sheet of Life Insurance Corporation (LIC) of India instead of gray market premium.
Giving ‘buy’ tag to LIC IPO, Astha Jain, Senior Research Analyst at Hem Securities said, “LIC is bringing the issue at price band of ₹902-949 per share at p/ev multiple of 1.1x. LIC being Fifth largest life insurer globally by GWP and the largest player in the fast growing and underpenetrated Indian life insurance sector is trusted brand and a customer-centric business model. has presence across India through an omni-channel distribution network with an unparalleled agency force. Company being largest asset manager in India with an established track record of financial performance and profitable growth looks decent investment avenue. Hence we recommend “Subscribe” on issue.”
Giving ‘subscribe’ tag for long term, Parth Nyati, Founder, Tradingo said, “LIC is synonymous with insurance in India and enjoys a huge competitive advantage in terms of brand value and a huge network of agents. However, there are concerns with the company like losing market share to private players, lower profitability & revenue growth compared to private players, lower VNB margins, and short-term persistence ratios, but the valuation at Price to Embedded Value of 1.1 discounts the above concerns. aware that the business of insurance is long-term in nature; therefore we recommend this issue for the long term.”
LIC IPO details
Tentative LIC IPO allotment date is 12th May 2022 whereas most likely LIC IPO listing date is 17th May 2022.
Disclaimer: The views and recommendations made above are those of individual analysts or brokering companies, and not of Mint.