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Home / Markets / Stock Markets /  LIC shares list at a discount. Should you buy, sell or hold?

LIC shares list at a discount. Should you buy, sell or hold?

LIC share price: Allottees, who have long-term view, can accumulated on every 5 per cent dip from its listing price levels whereas fresh investors can start buying LIC shares in a calibrated manner till it is above 730 levels, say stock market experts.

  • LIC share price slumped in stock market debut after record IPO

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Life Insurance Corporation of India (LIC) shares made a dull listing today on Indian bourses by opening at discount at 867 apiece on the BSE around 8.60 per cent lower from its upper price band of 949 per equity share. 

Life Insurance Corporation of India (LIC) shares made a dull listing today on Indian bourses by opening at discount at 867 apiece on the BSE around 8.60 per cent lower from its upper price band of 949 per equity share. 

However, for retail, policyholders and employees category allottees, listing discount is not as big as it is for anchor and other category investors as LIC had announced 60 per equity share discount to LIC policyholders whereas 45 per share discount to LIC employees and retail category investors. 

However, for retail, policyholders and employees category allottees, listing discount is not as big as it is for anchor and other category investors as LIC had announced 60 per equity share discount to LIC policyholders whereas 45 per share discount to LIC employees and retail category investors. 

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What analysts recommend on LIC shares' weak listing

According to stock market experts, allottees who applied for listing gains can hold the stock with stop loss at around 800 whereas fresh investors can keep on buying LIC shares in a calibrated manner maintaining stop loss at 735 per share levels.

“LIC shares have opened at a discounted price only due to the negative secondary market sentiments. Allottees, who have long-term view, can take this as an opportunity to accumulated on every 5 per cent dip from its listing price levels whereas fresh investors can start buying LIC shares in a calibrated manner till it is above 730 levels," said Anuj Gupta, ‪Vice President — Research at IIFL Securities.

“Those who applied for listing gains can maintain a stop loss of Rs. 800. New investors can take advantage of the dips to accumulate this share for the long term. Another point to note has that, LIC didn’t pay any dividends in the last financial year, so there are high chances that the company might declare a good dividend this year, thus making it a good dividend play," said Santosh Meena, Head of Research at Swastika Investmart Ltd.

Advising allottees to remain invested despite weak LIC share listing, Parth Nyati, Founder at Tradingo said, "The company’s weak listing can be attributed to high volatility in the markets and negative market sentiments. LIC enjoys many competitive advantages, further, the company’s issue was priced at a Price to Embedded value of 1.1x, providing a valuation comfort, so we suggest investors stay with the company for the long term despite the negative listing."

On why one should remain invested in LIC shares despite weak listing, Anuj Gupta of IIFL Securities said, "I believe that weakness in LIC shares would be limited as big players are expected to chip in at discounted levels. Apart from this, the insurance stock is a low float post-listing."

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Advising fresh investors to wait for some time, Ravi Singhal, Vice Chairman at GCL Securities said, "Those who missed to apply for the LIC IPO are advised to wait for few sessions as it has opened at a discounted price only because of the weak stock market sentiments. As that factor still exists, one should wait for the stock to stabilize and enter when there is big fall in LIC stock maintaining stop loss at 735 levels. LIC share holders who have long-term view, are advised to keep accumulating on big fall maintaining stop loss at 735."

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