LIC IPO is the largest insurance provider company in India. The corporation has a market share of above 66.2% in new business premiums. It also offers participating insurance products and non-participating products. These include unit-linked insurance products, saving insurance products, term insurance products, health insurance, and annuity & pension products.
The life insurance corporation of India has more than 2000 branches, 100 divisional offices, and 1,500 Satellite Offices. The 65-year-old firm has almost $500 billion in assets and 250 million policyholders. It also makes up close to two-thirds of the stock market. It operates internationally in countries such as Fiji, Mauritius, Bangladesh, Nepal, Singapore, Sri Lanka, UAE, Bahrain, Qatar, Kuwait, and the United Kingdom.
According to reports, funds from an IPO are critical to maintaining government finances. It is also important for meeting a deficit target of 6.4% of gross domestic product for the fiscal year.
Things to know about LLC listing
A decline in the LIC market
The Indian IPO market saw dizzying growth in 2021 but had a significant slowdown this year. These indicate the impact of geopolitical tensions, market volatility, and a price correction in overvalued stocks from recent IPOs. The rise in commodities, energy prices, and economic growth also play a significant role. “If market conditions improve, there could be a robust pipeline of IPOs this year as more than 20 companies have filed draft prospectuses in the first quarter of this year, Says Sandip Khetan, Partner and Financial Accounting Advisory Services Leader, EY India.”
LIC IPO Listing
The Life Insurance Corporation of India shares are debuting on Dalal Street. According to the Bombay Stock Exchange website, the LIC IPO listing date is the 17th of May 2022. BSE says ‘the equity shares of LIC will be listed and admitted to dealings on the Exchange. It will also be on the list of ‘A’ Group of Securities’ in a Special Pre-open Session.
Millions of Indian investors investing in the country’s biggest listing could turn sour on the equity market. This is inevitable if the stock follows the poor performance of its state-run predecessors.
The government of India has raised more than $2 billion by selling shares in the Life Insurance Corporation of India. These include millions of families across the country with LIC policies. The LIC stock started trading on May 17. The move is not good at a time when the stock markets are volatile worldwide. This is due to Russia’s invasion of Ukraine and rising interest rates. The deep-pocketed global funds can withstand volatility but small investors can note. The first-time shareholders created by LIC listing can also lose if the stock underperforms.
According to reports, half of the 21 Indian state-run companies that debuted in the stock market in 2010 are still trading below their issue price. These suggest there can also be a market price fall.
Smaller investors are expected to ride out any sudden decline in the overall value of the stock market. This is likely given that the grey market is indicating the shares may slip 30 rupees from their IPO price of 949. Unofficial grey premium is trading down into negative territory due to the depressed global markets in the bearish zone. However, we can still expect a soft listing at +/- 5% of the offer price.”
Listing day analysis
Analysts have said that the market volatility is likely to weigh on the listing day performance of LIC. They expect LIC to debut at a discount, and investors will not book any listing gains. However, they could make a marginal gain on the listing with the discount offered to the policyholders and retail investors.
“Life Insurance Corporation of India listing may happen at a 5% to 10% premium to the issue price, says some investor advisers”. They also revealed that the market conditions have been volatile. Therefore, if there is an opportunity to buy at a near-issue price, then it will be good for long-term investors.
When to take a call
According to an Independent IPO Expert, LIC IPO contains both positives and negatives. The current market situation is also very turbulent. The market liquidity is tightening across the world by central banks. Therefore, it is advisable to wait and watch the post listing before taking a call. This is because post listing shows how the business performs.
A downward movement in the LIC price is possible if the market remains volatile. Therefore, the LIC shares are expected to list at a discount price if that happens. Many experts have advised investors to invest in LIC for the long term because the insurance business is long-term in nature.
With the listing of LIC, several unicorn companies and tech start-ups are expecting to go public this year. These upcoming IPOs in India include Paradeep Phosphate. Ethos, eMudhra.