LIC IPO GMP, Subscription, Evaluation, Outlook Explained; Do you want to subscribe on the fifth day?

The initial public offering (IPO) of Life Insurance Corporation of India (LIC) obtained overwhelming response from investors to this point. India’s largest public issue will stay open on Sunday, May 8 for investors. LIC IPO was subscribed 1.66 instances on the fourth day of bidding. Investors throughout classes bid greater than 26.83 crore shares against the offer size of 16.2 crore shares.

Life Insurance Corporation of India opened its public issue on May 4. The government is planning to lift Rs 21,000 crore by way of LIC IPO by liquidating 3.5 per cent of its stake within the insurer. The price band for LIC IPO was fixed at Rs 902-949 per share. LIC policyholders are eligible for a reduction of Rs 60 per equity share. There will even be a discount of Rs Rs 45 each for retail individuals and employees categories.

LIC IPO Subscription Status

LIC IPO garnered total bids value Rs 24,365 crore until the fourth day of subscription. Investors, particularly LIC policyholders and employees confirmed large curiosity in India’s biggest life insurer’s public offer. The portion put aside for policyholders’ was subscribed 4.67 times, based on the information obtainable with the National Stock Exchange. The employees’ portion was booked 3.54 times on the fourth day. Retail investors bid 1.46 times for the shares reserved for them on Saturday. Non-institutional investors’ reserved portion was absolutely subscribed on May 6. The quota alloted for certified institutional investors was booked 67 per cent on Day 4.

LIC IPO Grey Market Premium

The unlisted shares of LIC was trading at premium of Rs 50 within the grey market, based on the information obtainable on IPO Watch on May 7. The grey market premium signifies that LIC shares will probably be listed at Rs 1,009, 6 per cent up in comparison with the higher-end of the worth band Rs 949. The sharp sell-off in the secondary market last week, impacted the grey market premium of LIC IPO, believes analysts. However, LIC GMP has improved in the last 24 hours.

LIC IPO Valuation:

“LIC with its dominant position is well positioned to seize the extremely underpenetrated life insurance industry in India. We like its growing deal with non-par products which may increase its worth of latest business or VNB margins.

It is valued at 1.1x 1HFY22 embedded worth (Rs 5.4 lakh crore) which is at vital discount to its personal listed peers,” said Motilal Oswal in a note.

LIC IPO: Should you Subscribe?

“LIC being Fifth largest life insurer globally by GWP and the largest player in the fast growing and underpenetrated Indian life insurance sector is trusted brand and a customer-centric business model. has presence across India through an omni-channel distribution network with an unparalleled agency force. Company being largest asset manager in India with an established track record of financial performance and profitable growth looks decent investment avenue. Hence we recommend subscribe on issue,” stated Hem Securities.

“Though there are issues over LIC concerning market share loss in individual insurance business and traditionally decrease margins, we consider that valuations think about a lot of the negatives. Expected enhancements in product mix and better transfer of surplus to shareholders account over the coming years are anticipated to drive earnings from present low levels, which together with low cost valuations provide comfort. Moreover, discount of ₹45 and ₹60 for retail investors and LIC policyholders makes the issue more attractive for them. Hence, we’re assigning a ‘subscribe’ suggestion to the issue,” Angel One said in a note.

Other well known brokerages such as Motilal Oswal, Reliance Securities, LKP Securities also recommended to subscribe LIC mega IPO.

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