accelerating inflated statistics and an ongoing global war have dampened the euphoria around mega IPO listings.
The government offloaded 3.5% of its stake in the insurance giant to raise Rs 21,000 crore through the sale of shares. LIC’s IPO opened for subscription from May 4-9 with a price range of Rs 902-949 per share. For LIC employees and retail investors, there was a discount of Rs 45 per share. Holders of LIC policies were entitled to a rebate of Rs 60 per share.
“As observed, the majority of large IPOs did not yield strong early listing gains. Given previous trends, LIC continued to follow the same path with a discounted listing,” said Mohit Nigam , Head – PMS, Hem Securities.
“We believe that personal savings and insurance awareness will increase, allowing the sector to outperform in the long term and will indirectly benefit LIC as it is the market leader in this sector,” he added.
Commenting on LIC’s IPO valuation, Yash Gupta, Equity Research Analyst, Angel One Ltd, said, “At the upper end of the price range, LIC’s IPO LIC is priced at P/EV (intrinsic value) of 1.1x, which is a significant discount compared to other publicly traded private life insurance companies online HDFC Life, ICICI Pru Life and SBI Life.
For LIC investors, Parth Nyati, Founder of Tradingo, said, “LIC enjoys many competitive advantages such as strong brand value, very large scale of operations, extensive agent network and envious distribution. a Price to Embedded value of 1.1x, providing valuation comfort, so we suggest investors stay with the company for the long term despite the negative rating. Those who requested listing gains can maintain a stop loss of Rs. 800. New investors can take advantage of dips to accumulate this long-term share. We would like to add that the further decline of the company will be limited due to the low rating of the floating positions.
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