LIC IPO Listing News: LIC lists at discount to IPO price, closes 8% lower at Rs 875 | India Business News – Times of India

MUMBAI: Life insurance coverage behemoth LIC on Tuesday listed at Rs 867, an 8.6% low cost to its supply value of Rs 949 and closed the maiden buying and selling day on the bourses at Rs 875, down almost 8% from its IPO value. On the shut of the session, shareholders in LIC misplaced about Rs 46,500 crore with the corporate’s market capitalisation now at Rs 5.5 lakh crore, in comparison with about Rs 6 lakh crore going by its IPO value.
The bulk government-owned life insurer is now the fifth most valued firm in India, behind RIL, TCS, HDFC Financial institution and Infosys however forward of giants like HUL, ICICI Financial institution and SBI, knowledge from BSE confirmed. It’s additionally probably the most valued PSU entity, forward of SBI, ONGC and NTPC.
On Tuesday, almost 5 crore shares modified fingers on NSE whereas on the BSE the corresponding quantity was about 27.6 lakh.

Within the run as much as LIC’s itemizing, the premium within the unofficial gray market had vanished, which indicated a muted itemizing for the life insurer. Publish itemizing, LIC’s policyholders who acquired the shares at Rs 889 and retail traders who have been allotted at Rs 904, noticed marginal losses to their holdings. Different shareholders have been allotted the shares at Rs 949.
On Could 9, LIC closed its Rs 21,000-crore IPO with a subscription determine of almost 3 times. Its policyholders and retail shareholders led the subscription figures, together with some sturdy assist from native establishments. By means of the supply the federal government offered 3.5% of its stake, or about 22.1 crore shares of the life insurer.
A report by world monetary home Macquarie put a value goal of Rs 1,000 with a impartial ranking. In response to its analysts, volatility in LIC’s embedded worth (EV) frightened them. Not like common manufacturing and providers corporations that are valued based mostly on their earnings-per-share or ebook worth, insurance coverage corporations are valued by their EVs which maintain the worth of the property they maintain.
In response to the report, over time, LIC’s market share in particular person enterprise (retail) has fallen resulting from lack of a “diversified product portfolio and extreme give attention to single premium and group enterprise.” It’s to be seen if LIC is ready to diversify its product combine in favour of excessive margin non-par merchandise, they wrote.
One other level of concern for Macquarie analysts is the inherent volatility in LIC’s EV, given a big portion of its EV constitutes marked-to-market unrealised fairness positive factors. “Any investor who’s taking an publicity to LIC inventory is not directly taking an publicity to fairness markets and the inherent volatility that comes with it,” its analysts led by Suresh Ganapathy wrote. They estimated {that a} 10% fall in fairness markets can erode about 7% of LIC’s EV, in comparison with round 1-2% for its private-sector friends.

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