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Life Insurance Corporation of India (LIC) shares will list next week on Tuesday, May 17, 2022 and the stock may see a tepid or discounted debut, as the counter in the grey market has slipped to discount in the past few days. The insurance behemoth had fixed the price band at 902-949 per equity share for the issue.

As per market observers, LIC shares are trading at a discount of 8 in the grey market today, down from 85 premium (GMP) at the start of the month. The grey market discount indicates that LIC shares 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, who is the founder of UnlistedArena.

LIC's mega public offering closed with nearly 3 times subscription at the end of the six-day bidding period which ended on Monday, predominately lapped up by domestic retail and institutional buyers but foreign investor participation remained muted. The anchor portion of LIC IPO was more than 70% subscribed by domestic institutions, including mutual funds insurance companies.

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

Even after the reduced size of about 20,557 crore, the share sale is the biggest ever in the country. LIC was formed by merging and nationalising 245 private life insurance companies on September 1, 1956, with an initial capital of 5 crore.

 

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