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LIC IPO: GMP still negative. Experts see 'moderate to discounted' share listing

By Asit Manohar
The government is planning to dilute its stake in LIC through the Initial Public Offering (IPO). (AFP)

According to stock market experts, much will depend upon the secondary market sentiments. If the market sentiment continues to remain negative, in that case LIC shares may debut at a discounted price whereas in case of trend reversal on Dalal Street, LIC shares may list with moderate premium.

Speaking on LIC IPO listing, Abhay Doshi, Founder at UnlisteArena.com said, "The Financial behemoth got a mixed response despite attractively priced valuations on account of subdued market conditions. The current sentiments indicates at par to discount listing, however, if market sentiments stabilises or improves till listing, we may see a positive impact. Hence, one should limit their expectations as far as listing gains are concerned."

Expecting weak LIC share listing Manoj Dalmia, Founder & Director at Proficient Equities Private Limited said, "LIC is the largest insurance provider company in India and would be listed on 17th May. The IPO was subscribed only 2.95 times in total. We are expecting that LIC share may list at a discounted price if the secondary market continues to faces selling pressure we have been witnessing for more than a week."

Stock market experts advised LIC IPO allottees to limit their expectations from the public issue as it won't be able to give double digit listing premium even when there is trend reversal in secondary market.

Ravi Singhal, Vice Chairman, GCL securities said, "As we can see, the market scenario is very negative following the opening of the LIC IPO. So, I believe it can list near par value with a 5 per cent premium, depending upon the market scenario in the coming weak."

Expecting moderate listing even when there is pull back rally in stock market next week, Ravi Singh, Vice President and Head of Research at Share India said, "The current market scenario is witnessing selling pressure, which would not be favorable for LIC share listing. However, it’s expected that Nifty may show some recovery next week. Hence, LIC IPO may list at a premium of around 5-8 per cent."

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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