LIC share listing: Life Insurance Corporation's market debut was in line with the sanguine mood seen in the grey market — an unofficial market for unlisted securities — in the past few days.
Life Insurance Corporation (LIC) made a lukewarm debut on stock exchanges on Tuesday, a week after India's biggest ever initial public offering (IPO) sailed through with a subscription of almost three times.
On BSE, LIC shares listed at Rs 867.2 apiece, a discount of Rs 81.8 or 8.6 percent to the upper end of its issue price range of Rs 902-949 apiece. The LIC stock began its journey on NSE at Rs 872 apiece, a discount of Rs 77 or 8.1 percent.
LIC shares finished the day at Rs 875.5 apiece on BSE and Rs 873 apiece on NSE.
The big market debut was in line with the sanguine mood seen in the grey market — an unofficial market for unlisted securities — in the past few days.
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Macquarie, which has a 'neutral' rating on Life Insurance Corp, sees a 5.4 percent upside in the insurer's stock from its issue price.
Market expert Prakash Diwan told CNBC-TV18 that retail investors would love to have LIC shares in their portfolio from a longer-term perspective even at the issue price.
"One is you are participating in an industry, and the stock represents the participation of a wholehearted way, which definitely has a secular growth uptrend. There is no doubt that it will grow, though the growth rate might vary quarter-on-quarter and year-on-year. Secondly, the LIC share weightage itself will probably start to see its way come into a lot of indices and once that happens, you will see the demand which is far more than what we have seen in the IPO," said Diwan, who is confident that LIC will garner secondary demand once the price stabilises.
"Thirdly, remember that today the market is in a mood that is not as buoyant as at the time of some of the other IPOs. There was too much of exuberance, the pricing was a bit steep, and hence the disappointment. With LIC that's probably not happening. I would believe retail investor for sure will be better off and institutional investors have their own dynamics to adjust," he added.
LIC's IPO, which was open for subscription from May 4 to May 9, to raise up to Rs 21,000 crore received bids worth Rs 61,975 crore with strong participation from employees and policyholders.
|Category||Subscription (No. of times the shares reserved)|
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The listing of LIC shares was followed by a rebound in the market following six straight sessions of losses mirroring weakness across global peers, as investors the world over fret over rising interest rates amid fears of receding economic growth.
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Under the LIC IPO, the government offloaded 3.5 percent of its stake in the insurance behemoth. Even after a reduction in size, LIC's IPO is the biggest public offer of all time in the country.
First Published: IST