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LIC IPO: What GMP signals ahead of shares listing tomorrow

An exterior view of Life Insurance Corporation of India's (LIC) headquarters is seen in Mumbai  (REUTERS)

As per market observers, LIC shares continue to trade at a discount of 19 in the grey market today. The grey market discount indicates that the stock may have a moderate to discounted listing.

"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," said Abhay Doshi, founder, UnlistedArena.

The initial share sale of the insurance behemoth closed on May 9 and shares were allocated to bidders on May 12. The government sold over 22.13 crore shares or 3.5% stake in the state-run insurer through the IPO at a price band of 902-949 a share.

The retail investors and eligible employees of LIC were offered a discount of 45 per equity share over the issue price, while policyholders got a discount of 60 per share. LIC policyholders and retail investors have got the shares at a price of 889 and 904 a piece, respectively.

The LIC IPO closed with nearly 3 times subscription, predominately lapped up by retail and institutional buyers, but foreign investor participation remained muted.

The government has diluted 3.5% stake in the life insurance firm through the Offer for Sale (OFS). It reduced the issue size from 5% decided earlier due to the choppy market conditions.