LIC IPO: Today is your last chance to bid, but should you?
If you have not yet bid for the initial public offering of Life Insurance Corporation (LIC) yet, today, May 9, will be the last day to subscribe for it.
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FollowIf you have not yet bid for the initial public offering of Life Insurance Corporation (LIC) yet, today, May 9, will be the last day to subscribe for it.
The state-owned insurance behemoth's Rs 21,000 crore IPO subscribed 1.91 times till 10 am on May 9, the sixth day of bidding. Bids for 31 crore equity shares have been received so far against the IPO size of 16.2 crore equity shares.
Also Read: LIC IPO: Step-by-step guide to apply online on Paytm, Upstox
The IPO has attracted retail investors, including employees and policyholders who are among the top bidders for the issue. According to Moneycontrol, policyholders bid 5.14 times the allotted quota and retail investors 1.63 times. LIC staff bought shares 3.84 times the portion set aside for them. The reserved portion for non-institutional investors was subscribed 1.29 times while QIBs have bid for 1.07 times the reserved portion so far.
The LIC IPO has held its ground despite the intense selloff in the global markets, rate hike concerns, inflationary worries and falling premiums in the grey market.
That said, the weak market condition is taking a toll on the flow of primary investments in such a large IPO. Shares of the insurance behemoth are commanding a premium of Rs 36 in the grey market, which has come down from Rs 85 earlier.
Should you invest?
According to market watchers, the LIC IPO grey market premium today is at Rs 36, which is Rs 24 lower from its Sunday GMP of Rs 60. This means that the grey market is expecting the LIC IPO to be listed at around Rs 985 levels (Rs 949 + Rs 36). That is still around 3 per cent higher than the LIC IPO price band of Rs 902 to Rs 949 per equity share.
Market experts say that considering that the insurance business is long-term in nature, investors should go in for the IPO only for the long term.
On the downside, foreign investors kept away from anchor investments in India's biggest insurer. Investors are worried about rising inflation and the rate of borrowing money in the country.
Also Read: Why LIC kept IPO open on Saturday for retail investors
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