LIC shares list below issue price of ₹900 vs ₹949

“The weak listing of the company can be attributed to high volatility in the markets and negative market sentiments. LIC enjoys a number of competitive advantages and the issue price of the company was priced at 1.1x the Embedded Value, thereby providing comfort to the valuation, so we suggest investors to stay with the company for long term despite negative listing We give,” said Partha Nyati, Founder, Tradingo.

Nyati suggests that those who have applied for listing gain can maintain the stop loss 800 whereas new investors can take advantage of dips to accumulate this stock for a longer period. “We would like to add that the company’s further downside will be limited due to low float post listing,” he said.

The insurance giant’s initial public offering (IPO) closed on May 9, 2022 and shares were allotted to the bidders on May 12. The government sold over 22.13 crore shares or 3.5% stake in LIC through initial share sale.

price range for LIC IPO was set between 902 and 949 per share. However, shares were allotted to investors at the upper end of the price band on May 12. LIC offers discounts to employees and retail investors 45 per share, while policyholders were given a discount of 60.

LIC IPO, India’s biggest ever, closed with nearly 3x subscriptions, mainly by retail and institutional buyers, but participation from foreign investors remained muted.

The state-run insurance giant last month slashed the size of its IPO by 5% from the pre-decided rate due to prevailing market conditions. LIC makes up about one third of the issue proceeds The government has set a disinvestment target of Rs 65,000 crore for the current financial year.

The government had planned to list LIC in March this year, but it had to be postponed as the market conditions were not favorable in the wake of Ukraine conflict.