LIC shares are trading at a discount in the gray market. That is, investors may suffer losses on listing. LIC’s unlisted shares are trading at a discount of Rs 15 to 20 in the unofficial market. Meaning it is trading at a discount of Rs 15-20 from the issue price of Rs 949. Investors watching the gray market say that investors should not expect too much from the listing of LIC. The shares of the company did not get subscription as expected and there is turmoil in the market. This has affected the sentiment.
How much will the listing be for?
UnlistedArena co-founder Abhay Doshi said that the listing may be closer to the issue price of LIC. Investors should not expect bumper profits on listing. The fall in the stock market has affected investor sentiment, affecting the chances of LIC’s listing gains. He said that this is the biggest issue of the country till date. After listing, there will be sufficient supply in the market. This is because retailers and wealthy investors can get out of it.
If the gray market is to be believed, then the stock of LIC can be listed around Rs 929. From this perspective, policyholders and employees will only benefit. Because of this, policyholders got a discount of Rs 60 per share and Rs 45 for employees. Employees and policyholders actively participated in this issue. But most retail investors, QIBs and HNIs had stayed away from it.
what investors to do
Sonam Srivastava, Founder, Wright Research, said that due to negative sentiments in the secondary market, LIC’s premium in the gray market has come down drastically in the last few days. We feel that LIC’s IPO may get listed at the issue price or with a nominal premium, provided the market remains normal. If the volatility in the stock market increases, it may get listed at a negative premium.
Ayush Agarwal, Senior Analyst at Swastika Investmart said that LIC’s listing may remain flat on Tuesday. He said the market is witnessing heavy volatility due to rising inflation, FII outflows, weakness in currency, geopolitical factors and concerns over rate hike. This has led to a sell-off in equity markets around the world. He said that the business of insurance is long term. Even if it is listed at a discount, then investors should stay in it for a long time.
You can read the stories of Economic Times for excellent articles related to more than 20 sectors of business and in-depth information related to the industry. Click here to read the informative information of Economic Times.