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Time, listing price, strategy, LIC stock price, details

All eyes are on the list from the Life Insurance Corporation of India (LIC) on Tuesday. LIC stock will be listed on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) at 10 a.m. on May 17. The giant insurer’s initial public offering (IPO) received a stellar response from investors when it opened for subscription. LIC’s IPO was booked 2.95 times out of the 16.20 crore shares offered during the subscription period. Given current market trends and weak demand in the gray market, market watchers are predicting a muted debut for LIC’s share on Tuesday.

LIC’s IPO was open for subscription from May 4-9. The price range was set at Rs 902-949 per share. For LIC employees and retail investors, there was a rebate of Rs 45 per share. Holders of LIC policies were entitled to a rebate of Rs 60 per share. LIC’s IPO was entirely an offer of sale (OFS) where the central government aimed to offload 3.5% of its stake in the life insurer.

Read also : LIC List Live Updates: LIC To Debut On BSE, NSE Soon, Will Investors Make Money Today?

LIC Registration Today: What to Expect

LIC’s IPO comes at a time when stock markets around the world are extremely volatile. The gray market premium for LIC’s IPO has been hovering in negative territory for the past few days due to weakness in global markets following Russia’s invasion of Ukraine in February. Last heard, the unlisted share of LIC was trading at a discount of Rs 12 in the gray market, according to IPO Watch.

“The unofficial gray premium was trading in negative territory mainly due to depressed global markets that have been in the bearish zone since the Russia-Ukraine war. Selling pressure continued in domestic markets where Foreign Institutional Investments (FII) remained net sellers. Considering all parameters, we expect a flexible quote between 5% discount and a premium on the bid price,” said Prashanth Tapse, Vice President (Research), Mehta Equities Ltd.

“While the gray market premium of the LIC IPO suggests that there could be a negative quote, but a probability of a par or slightly higher quote cannot be ruled out,” said Vinit Bolinjkar, Head of Research, Ventura Securities Ltd. According to the current BPF, LIC stock can be listed at a discount of Rs 25 off the issue price, he added.

LIC IPO Rating

Commenting on LIC’s IPO valuation, Yash Gupta, Equity Research Analyst, Angel One Ltd, said, “At the upper end of the price range, LIC’s IPO LIC is priced at P/EV (intrinsic value) of 1.1x, which is a significant discount compared to other publicly traded private life insurance companies online HDFC Life, ICICI Pru Life and SBI Life. While LIC’s valuations appear to be cheap relative to publicly traded private investors, investors should keep in mind that LIC has a 9.3% lower value margin on new business (NBV) as of 9MFY2021 per compared to private players who have VNB margins of 25-27 percent.

LIC listing: what should investors do?

“Given the still alarming and volatile market sentiments following global headlines, LIC may also trade muted, so we advise allocated investors not to panic and hold it for the medium to long term. Those considering to buy on a trading day should accumulate by taking volatility as an opportunity,” said Tapse. “LIC is offered at reasonable valuations and therefore investors can hold the stock for long-term gains,” Vinit added. Bolinjkar.

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