Life Insurance Corporation of India (LIC), which is expected to list next week on May 17, 2022, may see a decline in the stock market, where its shares have slipped at a discount to premium, according to gray market signals.
According to market observers, LIC Shares are trading at a discount in the range of Today 8-15 in the gray market, from the bottom 85 premium (GMP) at the beginning of the month. Gray market discount indicates that LIC shares may have moderate to discounted listings.
LIC’s mega public offering closed at the end of the six-day bidding period with nearly 3x subscription, mainly by domestic retail and institutional buyers, but participation from foreign investors remained muted. The insurance giant had fixed the price band 902-949 per equity share for issue.
Investors are also concerned about LIC’s ability to retain market share as private insurers such as HDFC Life Insurance Company and SBI Life Insurance Company expand. The private sector has been on an aggressive expansion spree during the pandemic, with new individual policy premiums rising while LIC is struggling.
government has raised 20,500 crore from the sale of its 3.5% stake in the insurance giant. LIC reduced its IPO Current choppy market conditions led to a size increase of 5% to 3.5%, significantly lower than earlier estimates of approx. 60,000 crores.
The anchor investor portion of the insurance giant’s initial share sale was oversubscribed last week, rising almost 5,620 crore from anchor investors before its issue.
LIC was formed on September 1, 1956 by the merger and nationalization of 245 private life insurance companies. As of December 2021, LIC had a market share of 71.8% in terms of premium or GWP, 61.4% in terms of new business premium. In terms of the number of individual policies issued, and 88.8% in terms of the number of group policies issued.