LIC GMP Down By 125% In Last 10 Days; Here’s What Investors Should Know

LIC IPO GMP Today: Life Insurance Corporation (LIC), which recently concluded India’s largest-ever public issue, completed its share allotment process on May 12. However, signals coming in from the gray market is not much encouraging. According to market observers, LIC’s share price is quoting at a discount of Rs 25 in the gray market today. According to market observers, LIC share price is quoting at a discount of Rs 25 in gray market today. They said that LIC IPO GMP (grey market premium) has been in the negative zone for the third successive day, which can not be taken as good development ahead of share listing date.

LIC IPO Latest GMP Today

Market observers tracking LIC shares in the gray market said that LIC IPO GMP today is minus Rs 25, which means LIC IPO gray market price has remained almost steady for the last 24 hours. LIC IPO GMP yesterday was minus Rs 26. Ahead of LIC IPO subscription opening, shares of the insurer were available in the gray market at a premium of Rs 92. So, in nearly 10 days, LIC IPO GMP has tumbled around 125 per cent. Market observers said that negative trend in the secondary markets have done major damage to the gray market sentiments in regard to LIC IPO. They said that ever since the opening of LIC IPO, the stock market mood across the world has remained bearish and this could be the major possible reason for LIC IPO GMP fall.

LIC IPO: What Does GMP Mean?

Gray Market is an unofficial market where individuals buy/sell IPO shares before they officially hit the exchanges. GPM is a premium amount at which gray market IPO shares are traded and it reflects how the IPO is likely to react on its listing day. Trade analysts believe that the not-so-encouraging response the IPO received from foreign and institutional investors is the primary reason behind its falling appeal in the gray market. The worsening of the Indian and global markets further added to the selling pressure in the unofficial market.

However, stock market experts said that gray market premium is not an ideal indicator of the success or failure of a public issue. They said that GMP is an unofficial data, which is non-regulated as well. So, one should look at the balance sheet of the company instead of gray market sentiments as the financials of the company gives a better and more concrete fundamental picture of the company.

Speaking about the LIC GMP, Abhay Doshi of Unlisted Arena, said: “The financial behemoth got a mixed response despite attractively priced valuations on account of subdued market conditions. The current sentiments indicate at par to discount listing, however, if market sentiments stabilize or improve till listing, we may see a positive impact. Hence, one should limit their expectations as far as listing gains are concerned.”

LIC IPO shares are expected to list on May 17, 2022, on public exchanges. LIC IPO has been subscribed 2.95 times on the final day in what could be seen as a healthy response from the investors even though participation from the FIIs remained subdued. The IPO received bids for 47.83 crore equity shares against 16.2 crore equity shares on offer. The policyholder bucket has been subscribed 6.11 times while the employees’ portion saw bidding of 4.39 times. The retail investors’ bid was subscribed 1.99 times and the non-institutional investors’ portion was subscribed 2.91 times.

Read all the Latest News , Breaking News and IPL 2022 Live Updates here.