Page 11 - Insurance Times JUNE 2022

LIC of India

News

LIC listing to boost trans- However, the counter made a quick 8.11 percent. The scrip eventually ended
recovery to hit Rs 920 on BSE, before the Day 1 at Rs 875.45 per share, a 7.75
parency, and its credit pro-
paring some gains to trade below Rs percent discount to its issue price.
file 900 levels during early hours.
"Though LIC listing has been below the
As a listed company, LIC will face more However, despite the poor listing, a issue price of Rs. 949, given the attrac-
demanding disclosure requirements, re- majority of market analysts are positive tive valuations and stability in the mar-
kets, we expect some buying interest in
sulting in increased transparency over on LIC and suggest investors to hold
the stock both from retail and intuitional
its operations, and encouraging it to pri- them for the long term.
investors. Since large amount of money
oritize profitable underwriting and risk
Ajit Mishra, VP- Research, Religare has been released post listing of LIC, part
management, Moody's Investor Service
Broking, said despite reasonable valua- of this money could get diverted into
said. It will, in turn, boost its capacity to
tions, LIC shares listed at a steep discount equity markets," said Hemang Jani of
generate and grow capital internally.
as the existing market conditions were Motilal Oswal Financial Services.
"We see the arrival of external share- not conducive for the insurance major.
71% of LIC anchor allot-
holders with experience in the insur-
"This is a solid opportunity for investors
ance industry as a further key benefit ment made to domestic
who want to make a fresh entry in the
of the IPO. We believe the presence of counter or add more shares if they have MFs
foreign stakeholders will bring particu-
an investment horizon of more than one LIC, raised Rs 5,627 crore from anchor
lar benefits in the areas of capital ad- investors ahead of its mega initial pub-
year," he added. "LIC is likely to turn out
equacy, financial flexibility and gover- lic offering (IPO), with 71 percent of the
to be a wealth creator in the long term."
nance standards, enhancing LIC's credit amount coming from domestic mutual
profile," Moody's said. LIC loses Rs 46,520 crore funds (MFs), shows a late disclosure
made by the company.
on debut listing
Can LIC stock prove to be "Out of the total allocation of
LIC lost Rs 46,520 crore in value, as the
59,296,853 equity shares to the anchor
a good long-term bet? market capitalisation (m-cap) on its
investors, 42,173,610 equity shares (71
market debut.
LIC made a less than expected debut percent of the total allocation) were
on bourses as the stock listed at a dis- The stock fetched an m-cap of Rs allotted to 15 domestic mutual funds
count, hurting all categories of IPO in- 5,53,675.05 crore at the close of the (MF) through 99 schemes," LIC said in a
vestors. LIC shares listed at Rs 867.20, listing day against Rs 6,00,242 crore at stock exchange disclosure.
a discount of 9 percent, on BSE. the issue price. This was higher than SBI MF subscribed to shares worth over
The listing price of LIC was non-profitable Hindustan Unilever Rs 5.27 lakh crore Rs 1,000 crore via four different
schemes. ICICI Prudential MF sub-
and ICICI Bank Rs 4.93 lakh crore, but
for all categories of investors, including
scribed to shares worth over Rs 700
policyholders who were given shares at fell short of Infosys Rs 6.38 lakh crore.
crore through over half a dozen
Rs 889 apiece after a discount of Rs 60 LIC listed at Rs 867.2 on BSE, a discount
schemes and HDFC MF subscribed to
per share, whereas employees and re- of 8.62 percent over its issue price of Rs shares worth over Rs 650 crore of the
tailers were allotted shares at Rs 904. 949. On NSE, it debuted at a discount of insurer via 10 different schemes.
The Insurance Times, June 2022 11