LIC IPO Trading Day Strategy: May 17 D-St Debut, Negative Gray Market Premium; should you buy, sell, hold?

Life Insurance Corporation of India (LIC) finalized the IPO share allocation on Thursday, May 12. LIC shares will make their debut on the BSE and NSE on May 17. The Rs 21,000-cr public offering received 2.95 times the subscription during the 6-day bidding process. LIC shares were offered to investors through the initial public offering at a fixed price band of Rs 902-949 per share of capital. In the gray market on Friday, LIC shares traded at a Rs9 discount to Rs940 each from the higher end of the price band, according to people who trade unlisted shares of companies. Analysts appear to be mixed on the LIC IPO share price, with some expecting a 10% premium listing, while others suggest taking a call on LIC shares after the market debut. of values.

With its initial public offering, LIC has become the largest ever on Dalal Street, surpassing Paytm’s public offering last year. By 2021, Paytm had raised Rs 18.3 billion through the initial public offering. Other big issues on Dalal Street include Coal India at almost Rs 15,500 crore in 2020 and Reliance Power at Rs 11,700 crore in 2008. Through LIC’s initial public offering, the government has diluted its stake in the oil giant. insurance sector by 3.5% and raised a large part of the divestment target for the current fiscal year.

LIC IPO Stock Quote: What Should Be The Trading Day Strategy?

Analysts at Axis Securities said volatility in the markets is likely to weigh on LIC’s trading day performance. They expect LIC to debut at a discount, and investors are unlikely to post any listing gains. “However, due to the discount offered to policyholders and retail investors, they could end up making a marginal profit on the listing,” they told FinancialExpress.com in an email.

LIC shares may trade at a 10% premium

Sandip Sabharwal, an investment adviser, told FinancialExpress.com that the LIC listing may occur at a 5 to 10 percent premium to the issue price. “Market conditions have been volatile, if there is an opportunity to buy close to the issue price, it will be good for long-term investors,” Sabharwal said.

Take a call at LIC after the list

There are both positives and negatives to the LIC IPO, Aditya Kondawar, an independent IPO expert, told FinancialExpress.com. The current market situation is also very turbulent with liquidity tightening around the world by central banks. “In the context of micro, macro and company-specific factors, one can wait and see the list of posts about how the business is doing and then take a call,” Kondawar said.

Akhilesh Jat, an analyst at CapitalVia Global Research, said shares in LIC’s initial public offering were at a discount on the gray market. LIC IPO gray market premium stood at over Rs 90 per share a week ago and the latest GMP is discounted to Rs 25. “If the market remains volatile, we may see further downward movement in the LIC price. Therefore, LIC stock is expected to trade at a discount price,” he said. Akhilesh Jat advised investors to invest in LIC for the long term as insurance business is long term in nature.

The stock recommendations in this story are from the respective research analysts and brokerage firms. Financial Express Online assumes no responsibility for its investment advice. Investments in the capital markets are subject to rules and regulations. Consult your investment advisor before investing.

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