LIC IPO: Shares To List Tomorrow; Status Of GMP | Check Details Here

LIC listing: The central government has fixed the issue price of LIC shares at Rs 949 apiece, the upper end of the IPO price band

New Delhi: The mega listing of the Life Insurance Corporation of India (LIC) will take place on the stock exchanges on May 17, 2022, (Tuesday).

The initial public offering of the state-run insurance behemoth was oversubscribed nearly three times its issue size. The central government has fixed the issue price of LIC shares at Rs 949 apiece, the upper end of the IPO price band, fetching the exchequer around Rs 20,557 crore.

The IPO, which had opened for subscription on May 4 and continued till May 9, saw a positive response. India’s largest insurer, LIC, will become the fifth-largest firm, with a valuation above Rs 6 lakh crore after listing. However, the insurer’s grey market premium (GMP) is indicating a lacklustre listing.

According to news reports, the shares of LIC continue to trade at a discount of Rs 19 in the grey market on Monday. The discount indicates that the stock may have a moderate to discounted listing.

Why LIC GMP is sinking? 

According to market analysts, the GMP of LIC doen't look impressive as the IPO didn't get significant response from foreign and institutional investors. This, as the market experts pointed out, could be the primary reason behind falling GMP.

LIC got a mixed response during IPO despite attractively priced valuations on account of subdued market conditions.

The initial share sale of the state-run insurer closed on May 9. The shares were allocated to bidders on May 12. The central government has diluted 3.5 per cent stake (about 22.13 crore shares) in the LIC via the IPO at a price band of Rs 902-949 apiece.

The retail investors and eligible employees of LIC were offered a discount of Rs 45 per equity share over the issue price. The policyholders got a discount of Rs 60 per share.

The policyholders and retail investors have got the shares at a price of Rs 889 and Rs 904 a piece, respectively.

The LIC IPO closed with nearly 3 times subscription, mostly lapped up by retail and institutional buyers, however, participation from foreign investor saw muted demand.

The government has offloaded 3.5 per cent stake in the company through the Offer for Sale (OFS). Previously, the government wanted to divest 5 per cent in the LIC, however, volatile market conditions due to geo-political tensions prompted the government to cut the issue size to 3.5 per cent.