Life Insurance Corporation of India (LIC) will be listed on stock exchanges tomorrow after the initial public offering (IPO), which was subscribed nearly three times the issue size. The government has fixed the issue price of LIC shares: 949 each, the upper end of the IPO price band, is bringing the treasury around 20,557 crores.
According to market observers, LIC Shares continue to trade at a discount of 19 in the gray market today. A gray market discount indicates that the stock may have a moderate to discounted listing.
“Despite attractive price valuations due to bearish market conditions, the financial giant received a mixed response. The current sentiment indicates par with the discounted list, however, if the market sentiment stabilizes or corrects till the listing, then we are positive. So, Abhay Doshi, founder of One Unlisted Arena, said they should limit their expectations as far as listing gains are concerned.
The insurance giant’s initial share sale closed on May 9 and shares were allotted to bidders on May 12. The government sold over 22.13 crore shares or 3.5% stake in the state-run insurer. IPO at the price band of 902-949 per share.
LIC’s retail investors and eligible employees were offered a discount of 45 per equity share on the issue price, while policyholders got a discount of 60 per share. LIC policyholders and retail investors have received shares at the cost of 889 more 904 a piece, respectively.
LIC IPO Closed with nearly 3x subscription, adoption mainly by retail and institutional buyers, but participation from foreign investors remained muted.
The government has reduced the 3.5% stake in the life insurance firm through an offer for sale (OFS). This reduced the issue size to below 5% as decided earlier due to market turmoil.