17 May , 2022 By : Kanchan Joshi
LIC IPO listing: Shares of Life Insurance Corporation (LIC) of India is going to debut on the Dalal Street today. As per the information available on the BSE website, LIC IPO listing date is 17th May 2022. The BSE notice informs that 'the equity shares of Life Insurance Corporation of India shall be listed and admitted to dealings on the Exchange in the list of 'A' Group of Securities' in a Special Pre-open Session (SPOS).
While bidders and market observers are busy finding out information in regard to LIC IPO listing price, grey market continues to remain bearish on LIC IPO. As per the market observers LIC IPO GMP (grey market premium) today is still negative as LIC share price is quoting a discount of ?28 in grey market today.
LIC IPO listing price: What experts say
According to stock market experts LIC IPO may not have a four-digit listing as it is expected to list around ?910 to ?920 in bear case whereas in bulls case it may list at around ?970 to ?980. So, the LIC share expected to have a soft debut today.
Speaking on LIC IPO share price opening, Ravi Singhal, Vice Chairman at GCL Securities said, "LIC IPO may have a soft opening today and may not be able to open in four digit. In bulls case it may open at around 3-4 per cent premium whereas in case of bear case, the public offer may open at around 5 per cent discount. So, the LIC IPO opening price is expected to be in the range of ?910 to ?980. In case of negative secondary markets, I am expecting LIC IPO to open at around ?910 to ?920 whereas in the case of positive opening of stock market today, the LIC share may open in ?970 to ?980 range."
Expecting flat listing of LIC shares, Aayush Agrawal, Senior Analyst at Swastika Investmart Ltd said, "We anticipate that LIC might have a flat listing tomorrow, based on the current market situation. Due to increased inflation statistics, FII outflows, currency weakness, geopolitical and rate hike-related worries, present markets are experiencing extraordinary volatility, this has caused sell-offs in equity markets all over the world."
The Swastika Investmart expert went on to add that the LIC is synonymous with insurance in India and enjoys a huge competitive advantage in terms of brand value and huge network of agents. However, there are concerns with the company like losing market share to private players, lower profitability & revenue growth compared to private players, lower VNB margins and short-term persistency ratios, but the valuation at Price to Embedded Value of 1.1 had discounted the above concerns. Nevertheless, investors must be aware that the business of insurance is long-term in nature; therefore we recommend investors to stay with the company for the long term even if the company lists at a discount.
"Even if the shares list flat on Tuesday, retail investors will still be able to make gains due to the discount that was offered so I don't see it as a bad bet as valuations are also attractive," Narendra Solanki, fundamental research head at domestic brokerage Anand Rathi.
Why LIC IPO GMP is negative
Highlighting the reason for negative grey market sentiment in regard to LIC IPO, Prashanth Tapse, Research Analyst at Mehta Equities said, "Unofficial grey premium is trading down into negative territory mainly on the back of depressed global markets which are in the bearish zone ... We expect a soft listing at /- 5% of the offer price."
Slowdown in IPO market
The Indian IPO market, which saw dizzying growth in 2021, has had a significant slowdown this year. This shows the impact of geopolitical tensions, stock market volatility, a price correction in over-valued stocks from recent IPOs, plus concerns about rising commodity and energy prices, and slower economic growth, EY said in a report on Monday.
In the first quarter of 2022, proceeds raised through India's primary markets were at $995 million via the three largest IPOs compared with $2.57 billion same period last year, EY said.
If market conditions improve there could be a robust pipeline of IPOs this year as more than 20 companies have filed draft prospectuses in first quarter of this year, Sandip Khetan, Partner and Financial Accounting Advisory Services Leader, EY India said.