LIC IPO GMP Grey Market Premium Day 3

LIC IPO GMP Grey Market Premium Day 3: Bidding for the Life Insurance Corporation of India’s public offering has begun and will continue through May 9th. The public issue is estimated to bring in Rs 21,000 crore to the exchequer, making it the country’s largest first public offering.

The equity shares are priced at Rs 902-949 each. Policyholders are entitled to a Rs 60 discount on the LIC IPO. Employees and retail investors get a Rs 45 discount on their bids.

Investors have responded well to LIC’s public offering. The policyholders’ portion has been subscribed 3.11 times, while the employees’ portion has been subscribed 2.22 times. Non-Institutional Investors (NII) have bid for 47 percent of their permitted quota, while Qualified Institutional Buyers (QIB) have offered 40 percent. Also read – Campus Activewear IPO Allotment Status 2022 Direct Link – Check Campus IPO Share status online

LIC IPO GMP Grey Market Premium Day 3

The shares’ grey market premium (GMP) has remained unchanged at Rs 65 since yesterday evening. Experts feel that the insurance behemoth’s GMP is stable because important secondary market indices ended at or near their Wednesday closing levels.

Due to poor secondary market sentiments, the LIC IPO GMP Grey Market Premium has dropped from Rs 90 to Rs 65 in the last three days, according to market observers. They believe that if the Dalal Street trade pattern reverses, the grey market sentiment would shift.

Many market analysts encourage investors to look at the insurance company’s financials rather than the grey market premium. They claim that GMP data is unregulated and unofficial and that it should not be relied upon when making financial decisions.

The subscription period for the LIC public issue began on May 4th. Prior to the bidding, the company had raised nearly Rs 5,000 crore from anchor investors. At a price of Rs 949 per equity share, 59.3 million shares were distributed to 123 investors. BNP Investments LLC, Societe Generale, Invesco India, the Government of Singapore, and others were among the major investors in the LIC IPO.

Should You Invest in the LIC IPO?

“As the share of non-par products increase, we believe there is good room for margin expansion, said Nirmal Bang Institutional Equities. Given the opportunity, India life insurance NBP is expected to grow at 14-16 per cent CAGR over the next decade. In light of LIC’s market positioning and expected product launches, the company is poised to benefit, it said with a subscribe rating”, said by Nirmal Bang Institutional Equities

“Though there are concerns over LIC regarding market share loss in individual insurance business and historically lower margins, we believe that valuations factor in most of the negatives,” said Angel One.

According to Religare Broking, the under penetration of life insurance in India, along with favourable demographic tailwinds, would drive multi-decadal growth in the life insurance business, with a CAGR of 14-16 percent from FY21 to FY32.

With a’subscribe’ rating on the issue, it stated, “LIC stands to profit given its leadership position, paired with continuous efforts on broadening product mix, enhancing its distribution network, and utilising technology to aid growth and achieve operating efficiency.”

Concerns about the LIC IPO GMP Grey Market Premium

The LIC IPO’s risks and concerns were raised by Motilal Oswal. “Adverse variation in persistency metrics could have a significant impact on LIC’s financial performance,” they stated. Second, changes in regulations may have a negative influence on company.”

It went on to say that LIC is mainly reliant on individual agents. If LIC is unable to retain and recruit individual agents in a timely and cost-effective manner, its operations could suffer materially.

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