On the unofficial market, LIC shares were trading at a minuscule premium of Rs 8-10 per share over the issue price, which is 90 per cent less than the premium of Rs 100-105 per share that it commanded a week. before.
Traders who follow the gray market said declining participation from large investors and weak market sentiment are weighing on LIC’s listing outlook.
LIC IPO was subscribed overall 2.95 times. The share for policyholders was subscribed 6.12 times, followed by 4.4 times the bidding for the employee share. HNI and QIB shares were oversubscribed more than 2 times, while the retail side failed to double bids on allocation.
Investors bid roughly Rs 60,000 crore for the Rs 20,557 crore issue, which was considerably less than Street expected. Due to this dull bidding, the insurance giant slipped into the gray market.
Abhay Doshi, co-founder of UnlistedArena, said that despite reasonable valuations, the time was not right for LIC to go out with its initial public offering. “Lower subscriptions, coupled with market volatility, added fuel to the fire,” he added.
The company sold its shares in the range of Rs902-949 each, at a discount of Rs60 per share for eligible policyholders and Rs45 per share for retail bidders and eligible company employees.
LIC’s initial public offering was the largest public offering in the domestic primary markets, with the government selling Rs 22.13 crore of shares or 3.5% stake in the company, valuing it at Rs 6 lakh crore, about 1.12 times the built-in value of Rs 5.4 lakh crore.
Varun Sridhar, CEO,
Money said: “LIC achieved the largest IPO in the history of the Indian markets, with more than 7 million applications. We advise investors to think medium to long term in IPO shares.”
However, the government is quite elated by the response to LIC’s primary offer. The secretary of the DIPAM, Tuhin Kanta Pandey, reported that the award of the LIC IPO will take place on May 12.
LIC IPO garnered a great response from all categories; shares to be awarded to bidders on May 12: DIPAM Secretary
Bidders in LIC’s IPO will be allocated shares on May 12, and the insurance giant will list on stock exchanges on May 17, DIPAM secretary Tuhin Kanta Pandey said on Monday. Briefing reporters after press time, Pandey said that LIC’s initial public offering has been highly successful across all segments.
B Gopkumar, MD & CEO, Axis Securities said LIC’s IPO received phenomenal turnout from retail investors, as anticipated, thanks to better discounts offered to investors who fall into these categories.
“We have seen this initial public offering act as a stimulus to drive retail participation in equity markets,” he added.
“We continue to believe that LIC will be a good long-term bet and play well in the growth story of the under-penetrated insurance industry.”