LIC IPO GMP Turns Negative; Know What It Means For Investors?

LIC IPO subscriptions closed on May 9. Investors who had bid for IPO shares must now be eagerly waiting for the allotment of IPO shares of the country’s largest insurance company. However, ahead of LIC IPO allotment, grey market sentiment in regard to the Initial Public Offering (IPO) of the insurance behemoth has further gone southward. After nosediving in the negative zone on Wednesday, LIC IPO GMP (grey market premium) has further gone down today.

What is The Current GMP of LIC IPO?

According to market observers, LIC shares are available at a discounted price of Rs 26 in the grey market today. Market observers said that LIC IPO GMP today is minus Rs 26, which is Rs 18 lower from its yesterday’s grey market premium of minus Rs 8. Market observers maintained that LIC IPO GMP has remained in the negative zone for the second successive day, which is not a good sign for the largest Indian public issue as it is just a few days away from listing. They said that negative secondary market sentiments have done the damage to grey market sentiments in regard to LIC IPO.

What Does GMP Mean?

Grey market premium or GMP is a premium amount paid at which initial public offering (IPO) shares are traded before it is listed on the stock exchanges. Market observers said that LIC IPO GMP today is minus Rs 26, which means the grey market is expecting that LIC IPO listing may happen around Rs 923 ( Rs 949 – Rs 26), which is around 3 per cent lower from its price band of Rs 902 to Rs 949 per equity share.

However, stock market experts suggested to investors that GMP is an unofficial data, which is non-regulated. So, those who follow GMP are advised to go through the financials of the company as well because the balance sheet of the company will give a better picture about the company’s fundamentals.

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 stabilises or improves till listing, we may see a positive impact. Hence, one should limit their expectations as far as listing gains are concerned.”

LIC IPO Details

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.

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