Shares of Life Insurance Corporation of India LIC may be listed at a discount on bourses on Tuesday if one goes by the grey market premium. According to market watchers, LIC shares are available at a discount of Rs 20 in the unlisted market.
The issue price has been set at Rs 949 per share, which is the upper end of the IPO price band, fetching the exchequer around Rs 20,557 crore.
Abhay Doshi, Founder of Unlisted Arena said that Shares of LIC were trading at a discount of 20 in the unlisted market. The financial behemoth got mixed responses despite attractively priced valuations on account of subdued market conditions. If market sentiments stabilise till listing, we may see a positive impact, as it indicates a par to discount listing. As far as listing gains are concerned, one should limit their expectations. The insurer's public offer got subscribed nearly 3 times on the final day of the offer on May 9, led by the strong response from policyholders, employees and retail investors. The price band was set to be Rs 902 -- 949 per share. Retail investors and employees of LIC were offered a special discount of 45 per share. There was a discount of 60 rupees for policyholders.
UnlistedZone added seconds to Doshi, co-founder, Dinesh Gupta. LIC shares were available at a discount of 15 -- 20 in the unlisted market. He said that subdues market sentiment may affect the grey market premium in the recent past, so we may see the listing at par or discount on Tuesday.
A majority of brokerages had given a reason for their decision.
According to Aayush Agrawal, senior analyst, Swastika Investmart, we anticipate that LIC might have a flat listing tomorrow, based on the current market situation. The present markets are experiencing extraordinary volatility due to the increased inflation statistics, FII outflows, currency weakness and geopolitical and rate hike-related worries. This has caused sell-offs in equity markets all over the world. In India, LIC has a huge competitive advantage in terms of brand value and a robust network of agents. The business of insurance is long term in nature. Agrawal said that investors should stay with the company for the long term even if the company lists at a discount.