LIC IPO: LIC can make a decent debut in the midst of market uncertainty

MUMBAI: Insurance behemoth (LIC) may make a modest appearance on Tuesday in a decent stock market as uncertain investor sentiment may limit first-day gains as some previous lists have seen. In the informal gray market, the stock is trading around ₹ 19 below the issue price of ₹ 949 per share. Although the discount dropped to 25 last week, it points to a softer list.

“We are expecting a soft listing of LIC IPOs as we have seen good correction in the market over the last 15-20 days, due to global and domestic issues, such as rate hikes, which have reduced the listing expectations,” said Gupta, an equity researcher at Angel One. Analyst.

Gupta suggested buying the stock for further weakness.

“If one wants to buy for the long term, one can buy 50% now and 50% in case of any fall in the near term. Short-term investors should wait for some time, let the stock price stabilize,” he said.

LIC’s IPO – India’s largest initial share sale, which was open for subscription between May 4 and May 9, was subscribed almost 3 times, leading to strong demand from insurer policyholders and employees.

Although domestic companies also participated, the appetite of foreign investors was moderate. About 70% of the insurance chief’s anchor books were subscribed by domestic mutual funds.

“We expect LIC to have a flat list tomorrow based on the current market situation,” said Ayush Agrawal, senior analyst. “However, a moderate float in the stock may limit post-listing declines.”

Some analysts suggest buying shares, citing strong prospects.

“Given the state of the secondary market, LIC may list equally (with IPO pricing). We recommend buying 1.1’s price-to-embedded value rating as an at-par list in a medium to long-term perspective. Historically, the timing is interesting.” Gitanjali Kedia, a senior research analyst at SPTulsian.com, recommends subscribing to IPOs because of the size of the LIC, the sovereign guarantee of its policies and the issue price.

The government has sold 22.13 crore shares or 3.5% shares of the company, valued at ₹ 6 lakh crore. LIC’s IPO received about ₹ 20,557 crore.