Last day to subscribe to LIC IPO, GMP drops to ₹60
- The six-day long IPO of the insurance behemoth Life Insurance Corporation of India (LIC) will close today, May 9, Monday.
- So far till May 7, 2:15 p.m. the IPO was subscribed 1.51 times by investors.
- Shares of the company are currently commanding a premium of ₹60 in the grey market, which has come down from ₹85 earlier.
AdvertisementToday, May 9, is the last day to subscribe to the ₹21,000 crore LIC IPO, the state-owned insurance behemoth, which has seen 138% subscription as of May 6.
In the first four days of the subscription process, the IPO received a tepid response from investors as it was oversubscribed by 1.51 times. The current weak market condition is taking a toll on the flow of primary investments in such a large IPO.
Investors are concerned with rising inflation and the rate of borrowing money in the country.
Another factor behind the seemingly weaker-than-expected response to the LIC IPO could be the size – at ₹21,000 crore, this is India’s biggest IPO yet. The government is looking to sell 22.13 crore shares or 3.5% stake.
Shares of the company are commanding a premium of ₹60 in the grey market, which has come down from ₹85 earlier.
|Qualified institutional buyers||0.67 times|
|Non-institutional investors||0.91 times|
The LIC IPO has also received poor demand from foreign investors as very few showed up for anchor investments. On the positive side, domestic mutual funds compensated for the absence of FIIs.
If you’re looking to invest in the IPO, here is what analysts are suggesting to IPO investors. Although analysts are concerned about losing market share they believe LIC’s large distribution channel will keep it at the top. They believe LIC is significantly lower valued than other listed private players despite being the dominant player.
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