Listing of the country's largest LIC IPO can be done at a discount
There may be a loss in LIC IPO: Listing of the country's largest IPO can be done at a discount, the price is down by Rs 20 in the gray market The listing of the country's largest LIC IPO can be done at a discount. There are indications of this in the gray market premium. In the gray market, LIC is at a discount of Rs 20 from its issue price of Rs 949 per share.
That is, it is only Rs 25 more than the discount rate received by retail investors in the IPO. In the gray market, LIC's premium fell on Tuesday to Rs 10 and became negative on Wednesday. If it falls further, investors may suffer losses. Most of the dealers tracking the gray market said that due to poor response to the IPO from foreign and institutional investors, the gray market sentiment has been affected. The volatility in the secondary market is adding fuel to the fire.
Abhay Doshi, Co-Founder, Unlisted Area said, “Inflation concerns have tightened the policy which is hurting the entire equity space. LIC's IPO has received a good response from investors. However, despite attractive valuations, it has failed to woo foreign and institutional investors. May 9 was the last day of subscription for this IPO, which opened for retail and other investors on May 4. The issue is subscribed 2.95 times. Bids were received for 47.77 crore shares against 16.2 crore shares.
The portion reserved for policyholders is subscribed 6.10 times, staff 4.39 times and retail investors' share 1.99 times. The allotted quota of QIBs has received 2.83 times the bids, while the NII's share has been subscribed 2.91 times. The shares will be listed on the stock exchange on May 17. Most of the market analysts had advised investing in IPO.
Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said that the allotment of LIC shares will take place on May 12, while the listing will take place on Tuesday, May 17. Earlier LIC shares were running at a premium of Rs 100 in the gray market. Now they have come at a discount of Rs.20. This discount may increase further and may cause loss to the investors.