LIC could make a modest debut amid market uncertainty
The Insurance behemoth LIC of India has the potential to make a modest stock market debut on Tuesday as the uncertain investor sentiment can limit first-day profits from some of the previous listings. In the unofficial gray market, the stock is trading about Rs.19 below the issue price of Rs.949 per share. The discount is down from Rs.25 last week, but it still shows the softlist.
We expect LIC IPO listings to be weak, as global and domestic issues, such as interest rate hikes that have lowered expectations for listings, have seen positive changes in the market over the last 1520 days. ” Analyst Yash Gupta said. Gupta recommends buying stock with further weaknesses .
“If someone wants to buy in the long run, they can buy 50% now and buy 50% in the short term dip. Short-term investors should wait for a while to calm the stock.” he said.
LIC IPO, India’s largest-ever first share sale, offered between May 4th and 9th, was subscribed almost three times, driven by strong demand from policyholders and insurance company employees.
The Domestic institutional investors also participated, but foreign investors were less motivated. About 70% of the insurance major anchor books were underwritten by domestic investment trusts.
Ayush Agrawal, a Senior Analyst at Swastika Investmart, said: “But modest fluctuations in the stock may limit its post-listing decline.”
Some analysts cite a strong outlook and recommend this stock as a buy.
“Given the secondary market situation, LIC may be listed on the par (IPO price). Historically, the price for an embedded value valuation that is a multiple of 1.1 is attractive, so the medium- to long-term listing on the par It’s a good idea to buy from a professional perspective. ”Geetanjali Kedia, Senior Research Analyst at SPTulsian.com, said signing an IPO given the size of the LIC, government guarantees on policies, and issue prices. Recommended.
The Government sold 22.13 billion shares of the company, or 3.5%, and rated the company at Rs 60,000. LIC’s IPO has raised approximately Rs. 2055.7 billion for the Treasury.