LIC Debuts On D-Street: Pre-Open On BSE Indicates Lower Listing Price

17 May 2022, 09:07 AM IST

The centre has raised around Rs 21,000 crore from selling a 3.5 per cent stake in LIC

According to the pre-open indicative price on the BSE, LIC's debut open will be lower than its allotment price of Rs 949.
If the premium in the grey market is anything to go by, then LIC shares are likely to trade below their IPO allotment price of Rs 949 per share. Indeed, the premium for LIC shares in the grey market has fallen nearly 70 per cent since the IPO opened for subscription on May 9, underscoring sentiment that the risks are tilted toward lower listing on stock exchanges.
The listing comes when financial markets have been whiplashed on stagflation worries as major central banks are poised on an aggressive interest rate hike path to combat multi-decade high inflation. Emerging markets assets have taken a beating on foreign capital exodus driven by the dollar's appeal on a general increase in flight-to-safety trades.
LIC priced its public offer, India's largest-ever, at the top of the indicated range (Rs 902-949), at Rs 949. The insurance company's shares were last trading at a discount of around Rs 30 in the grey market from the upper end of the price band, a sharp decline from a premium of 100 rupees earlier this month.
The government has raised Rs 21,000 crore by selling 3.5 per cent of its stake in the insurance behemoth, a third of its initial target plan. Despite wild gyrations in global financial markets, LIC's IPO got an overwhelming response. The offer was oversubscribed nearly three times, led by policyholders who bid for over six times the shares on offer.