Grey market indicates LIC share prices could be offered at discount

In the grey market, shares are being exchanged between Rs 940 and Rs 945, according to a Business Standard report.

The expected IPO price is Rs 949, according to media reports.

The Centre had offered a discount of Rs 60 per share to policyholders, and Rs 45 per share to staff and retail investors.

The stock market listing of LIC is expected to happen on Tuesday, as per media reports.

The Indian insurance giant's grey market premium fell from Rs 100 to Rs 10 on Tuesday and on Wednesday, a day before allotment, it turned negative, The Economic Times (ET) reported.

Most dealers who are tracking the grey market felt that the weak response from foreign and institutional investors affected the market sentiments, reported ET.

"Despite the attractive valuations and extra days for subscription, LIC failed to woo HNIs and institutional bidders, which has ultimately dragged grey market numbers into the negative territory," Co-founder at UnlistedArea Abhay Doshi told ET.

However, analysts are positive about the IPO due to LIC's rational valuations and growth prospects in the insurance sector, reported ET.

In a press conference held on May 9, the closing day of LIC's IPO, Department of Investment & Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said, "Predominantly, this issue has been domestically lifted."

He said the IPO offer which started on May 4 got closed on May 9 and met with tremendous response from all categories including policyholders, retail investors as well as qualified institutional buyers (QIB) and non-institutional investors (NII).

LIC's IPO received bids for Rs 44,000 crore and seven million applicants, the highest for any IPO on the primary domestic market, as per media reports.

The policyholders' portion was oversubscribed 5.97 times, staff bid 4.31 times the allotted quota, retail investors 1.94 times, and the portion set aside for QIB was booked 2.83 times and that of NII 2.8 times.