LIC IPO: Life Insurance Corporation of India (LIC) IPO was oversubscribed by all classes of traders on Monday morning as the problem entered the final day of the 6-day bidding interval. The Rs 21,000-crore IPO was totally subscribed final week however Qualified Institutional Buyers (QIBs) have been but to bid for his or her portion completely. LIC IPO has up to now obtained bids for 32.35 crore fairness shares, in opposition to the 16.2 crore shares on supply, taking the general subscription tally to 2 occasions the problem dimension. LIC IPO continued to get traction over the weekend after traders have been allowed to bid for the mega-issue even over the weekend.
Subscription standing
So far on the ultimate day of the subscription part, QIBs portion has been subscribed 1.12 occasions with bids coming in for 4.43 crore fairness shares in opposition to the three.95 crore shares reserved for QIBs. Non-Institutional Investors (NIIs) have subscribed their reserved shares 1.33 occasions, bidding for 3.95 crore shares in opposition to the two.96 crore on supply for them. The Retail Investors portion has been subscribed 1.69 occasions up to now, with bids coming in for 11.68 crore fairness shares. 6.91 crore fairness shares are reserved for retail traders.
Employees of LIC and Policyholders have subscribed to their parts essentially the most. Employee subscription tally reached 3.95 occasions with bids coming in for 62.56 lakh shares, whereas Policyholder’s quota was bid 5.3 occasions as traders bid for 11.75 crore fairness shares.
LIC IPO gray market premium (GMP) slips
On the ultimate day of bidding, LIC’s gray market premium (GMP) was seen sliding decrease. On Monday, LIC fairness shares have been quoting a premium of Rs 40 per share within the unlisted house. This was down from Rs 60 premium shares have been buying and selling over the weekend.
Analysts bullish
Brokerage companies have been bullish on LIC IPO with most advising traders to subscribe to the problem. Analysts have highlighted that LIC has been priced attractively. “At the upper-priced band of Rs 949, the issue is valued at 1.1x EV (Sep ‘21) which is at a significant discount to private sector valuations,” Nirmal Bang stated in a report. Geojit Financial Services stated that SBI Life Insurance Company trades at a P/EVPS of three.2x whereas HDFC Life Insurance Company is at 3.9x and ICICI Prudential Life Insurance Company is at 2.5x.
Currently, LIC has a 61.5% when it comes to New Business Premium (or NBP), a 71.8% market share when it comes to variety of particular person insurance policies issued, an 88.8% market share when it comes to the variety of group insurance policies issued for the 9 months ended December 31, 2021. “Even though headwinds like declining market share, lower short-term persistency ratios and sub-par margins demand a discount to private players, the current valuation is attractive considering its strong market presence, improvement in profitability due to changes in surplus distribution norms and strong sector growth outlook,” analysts at Geojit Financial Services wrote within the IPO be aware.
Source: www.financialexpress.com”