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LIC IPO Latest Gray Market Price: The craze of LIC is decreasing continuously in the gray market, market fluctuations will affect the listing – News

LIC IPO GMP Update: In the midst of huge volatility in the market, the craze of the IPO of the insurance company Life Insurance Corporation (LIC) has decreased in the gray market. If we look at the Gray Market Premium (GMP), then the indications regarding the listing are getting weaker. According to market observers, the share price has come down to Rs 10 in the gray market. LIC’s premium had crossed Rs 100 in the gray market on the first day of IPO. In this sense, it has weakened more than 10 times. However, experts and brokerage houses are positive on the stock of the company for the long term.

GMP: LIC price in gray market

The latest price of LIC’s share in the gray market has come to Rs 10 today i.e. on May 11, 2022. Even on IPO Watch, its price is visible at Rs.10 only. On May 9 it was at Rs 40, while on May 6 it was at Rs 50. On the first day of the issue, on May 4, its price had reached Rs 105 in the gray market. However, that day it came back to Rs 65. At the same time, LIC’s premium went up to Rs 85 in the gray market before the IPO opened.

The stock is at a premium of Rs 10 in the gray market. From this perspective, the stock may get listed at Rs 959, an increase of Rs 10 from the upper price band of Rs 949. That is, according to the current indications, the listing of the stock may be flat.

How has been the response of investors

Talking about the subscription, the issue of LIC is 2.95 times i.e. about 295 percent. The reserve portion has received a good response for employees and policyholders. The reserve quota for employees is filled about 4.40 times. While the reserve quota for policyholders has received 6.11 times the bids. The share of QIB is 2.83 times, that of NII is 2.91 times and the reserve quota for retail investors is filled at 1.99 times.

Opinion on Shares and Sectors

According to brokerage house ICICI Securities, due to the low penetration of insurance in a country with such a large population, there is a huge potential for further growth of this sector. The GWP for life insurance companies is estimated to grow at a CAGR of 14-15% during FY21-26 and may reach ₹12.4 lakh crore. The embedded value of LIC was Rs 5.4 lakh crore as of 30 September 2021. Going by the upper price band, the issue is priced at a value of 1.1 to embedded value at a valuation of Rs 6 lakh crore.

LIC’s Pan India Presence makes it even stronger. The company has 2048 branch offices and 1559 satellite offices across the country. The company has a reach of 91 percent districts of the country. It is the largest asset manager in the sector. Financial track record is good. The company’s market share in terms of premium (or GWP) is 61.6 percent. At the same time, in the case of individual policies issued till December 31, 2021, the market share is about 71.8 percent. The asset under management of LIC is 40.1 lakh crores, which is the highest. The annual premium of the company in FY21 has been 4 lakh crores.

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