Shivam Bajaj, Founder & CEO at Avener Capital on LIC
Despite the reduction in the pre-IPO valuation of LIC, the scrip has still listed at a discount on the bourses which is in tandem with the diminution in insurance companies’ valuation and softness in the markets due to macro-economic constraints. However, given the attractive fundamentals, stability in operating metrics and expected recovery in the markets, we can potentially see some buying interest from investors'
The stock ended the first day of trading at Rs 872.70, down Rs 76.30, or 8.04 percent. It has touched an intraday high of Rs 920.00 and an intraday low of Rs 860.10.
Vivek Gupta, MD, GEPL Capital
India's biggest-ever IPO, LIC finally listed its shares at a discounted rate of over 8% i.e., Rs 77 on the BSE and the NSE. This discount reduces the break-even prices for employees and retailers which stand at Rs 904 and policyholders at Rs 889.
Hold on to your shares from a medium- to long-term perspective. In fact, in case you are planning to buy today, you should accumulate by taking volatility as an opportunity. LIC is trading at a discounted rate and you might be able to accumulate more as the Mcap/EV ratio of 1.1x becomes more attractive than what it was in the primary market. We must be aware that the business of insurance in itself is long-term in nature and therefore I recommend staying vested.
At 15:15 hrs Life Insurance Corporation of India was quoting at Rs 874.95, down Rs 74.05, or 7.80 percent. It has touched an intraday high of Rs 920.00 and an intraday low of Rs 860.10.
Market depth - Order Book
Vinod Nair, Head of Research at Geojit Financial Services on LIC listing
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The subdued listing of LIC is in-line with expectations in context to the drop in market dynamics from the opening of the IPO to the listing date. The listing price has fallen in tandem with the fall of insurance sector valuations, maintaining the discount of about 70% to the industry’s average. Positively, the stock was brought at the dip. We believe that LIC is a decent investment opportunity in the short to medium-term considering its strong market presence, improvement in future profitability due to the changes in surplus distribution norms and strong sector growth outlook. LIC can perform well when we have a bounce in the market and positive performance in the insurance sector.
Vinod Nair, Head of Research at Geojit Financial Services
The subdued listing of LIC is in-line with expectations in context to the drop in market dynamics from the opening of the IPO to the listing date. The listing price has fallen in tandem with the fall of insurance sector valuations, maintaining the discount of about 70% to the industry’s average. Positively, the stock was brought at the dip. We believe that LIC is a decent investment opportunity in the short to medium-term considering its strong market presence, improvement in future profitability due to the changes in surplus distribution norms and strong sector growth outlook. LIC can perform well when we have a bounce in the market and positive performance in the insurance sector
B Gopkumar, MD & CEO, Axis Securities
While LIC debuted at a slight discount to its issue price, investors should not look to exit at current levels and hold the stock from a medium to long-term perspective. We believe LIC continues to be a solid bet in the long run as it is a play on the growth story of the under-penetrated life insurance industry. Its sustained market leadership position, robust pan-India distribution network, and shifting focus towards profitable products, thus supporting margins and improving persistency ratios, will collectively make LIC an attractive pick from a long-term perspective.
Life Insurance Corporation of India was quoting at Rs 887.35, down Rs 61.65, or 6.50 percent. It has touched an intraday high of Rs 920.00 and an intraday low of Rs 860.10.
Mohit Ralhan, Managing Partner, TIW Capital Group, on the LIC IPO being listed on the stock exchanges
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The 8% lower debut of LIC shares is a commentary on the current state of global markets rather than the company itself. In terms of subscription, the LIC IPO was extremely successful given the fact that it was the biggest IPO of India. LIC has a solid business, trusted brand, and market leadership in an underpenetrated insurance market. In FY-21, LIC’s market share was about 75% for individual policies and 81% for group policies. It is the top life insurance company by a wide margin. The insurance industry in India is growing at an annual rate of about 15% and the growth is expected to sustain over a long period of time given that insurance penetration in India is a meagre 3.2% which tends to be more than 8% for developed economies and it is about 5% in China. LIC is a typical blue-chip company which is expected to give steady returns over a long period of time and therefore returns over a day is not relevant. It is expected to remain quite attractive for investors.
LIC market depth - order book
LIC was trading at Rs 900.55, down Rs 48.45, or 5.11 percent. It has touched an intraday high of Rs 920 and an intraday low of Rs 860.10.
Parth Nyati, Founder, Tradingo on LIC lisiting
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The company’s weak listing can be attributed to high volatility in the markets and negative market sentiments. The company is synonymous with insurance in India and enjoys a phenomenal brand recall. We believe India’s highly underpenetrated life insurance space is still at a nascent stage and is attractively positioned to capture the huge growth opportunity. LIC enjoys many competitive advantages like strong brand value, extremely large scale of operations, a huge network of agents, and an envious distribution network, further, the company’s issue was priced at a Price to Embedded value of 1.1x, providing a valuation comfort, so we suggest investors to stay with the company for the long term despite the negative listing. Those who applied for listing gains can maintain a stop loss of Rs. 800. New investors can take advantage of the dips to accumulate this share for the long term. We would like to add that the company's further downside will be limited due to low float post listing.
Hemang Jani, Head - Equity Strategy, Broking and Distribution, Motilal Oswal Financial Services
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Though LIC listing has been below the issue price of Rs 949, given the attractive valuations and stability in the markets, we expect some buying interest in the stock both from retail and intuitional investors. Since large amount of money has been released post listing of LIC, part of this money could get diverted into equity markets.
Santosh Meena, Head of Research, Swastika Investmart
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The current market is not conducive for primary issues and LIC being the largest IPO has witnessed a negative listing, the current market volatility has weighed down on the insurance titan’s listing. However, the prospects for the insurance industry in India are good due to the under penetration of insurance and a long runway of growth; hence LIC being the largest player will be the beneficiary in the long term. Insurance is a business of scale, and there is no company to match the scale of LIC, so we suggest investors not be bothered about the negative listing and stay with the company for the long term. Those who applied for listing gains can maintain a stop loss of Rs 800. New investors can take advantage of the dips to accumulate this share for the long term. Another point to note has that, LIC didn’t pay any dividends in the last financial year, so there are high chances that the company might declare a good dividend this year, thus making it a good dividend play.
LIC stock price movement as it starts trading on exchanges
Life Insurance Corporation lists at Rs 865 per share against issue price of Rs 949 per share, a discount of 9%
LIC settles at Rs 872 per share in pre-open on NSE against issue price of Rs 949 per share, according to CNBC-TV18
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Dipam Secretary on LIC
: LIC embedded value will be available regularly for investors to see.Response taken on our website was less than 10 milliseconds for allotment. 16500 calls were attended by call centres to facilitate allotment.
Yash Gupta- Equity Research Analyst, Angel One on LIC
LIC shares to get listed today, retail investors who have to receive the allotment can hold list for short term to medium term. LIC will be trading at P/EV (embedded value) of 1.1x at an upper price band of Rs 949 which is at a significant discount to other listed private life insurance companies like HDFC Life, ICICI Pru Life, and SBI Life. LIC IPO initially may see some selling pressure as all the retail investors have received the allotment. Looking at the cheap valuations of LIC as compared to other listed players, it offers comfort and investors with a longer time horizon can hold or buy more.
Prashanth Tapse, Vice President (Research), Mehta Equities
Investors' eye are glued to Life Insurance Corporation's (LIC) listing. However, our call of the day suggests LIC is likely to witness a sluggish opening and perhaps the stock could list anywhere between Rs 900-Rs 945.
LIC’s grey market premium (GMP) too is indicating a lackluster listing. LIC’s weak listing can dent sentiments further at Dalal Street.
Another main reason for the pessimism can be attributed to relentless selling from the FIIs camp. FIIs continue to be net sellers for the eighth straight month since October 2021. The FIIs camp have sold shares worth Rs 32,701 mark in the month of May. In yesterday’s trade too, FIIs sold shares worth Rs 1788.90 crore while DIIs bought shares worth Rs 1428.40 crore.
LIC Team (Chairperson & MDs) along with DIPAM Secretary
Aayush
Agrawal, Senior Analyst, Swastika Investmart on LIC:We anticipate that LIC might have a flat listing today, based on the current market situation. Due to increased inflation statistics, FII outflows, currency weakness, geopolitical and rate hike-related worries, present markets are experiencing extraordinary volatility, this has caused sell-offs in equity markets all over the world. According to recent grey market patterns, the company's unlisted shares were selling at Rs 936 per share on Saturday (May 16), a discount of Rs 13 to the IPO price band's upper range. However, the stock's modest float may limit the stock's post-listing decline.
LIC is synonymous with insurance in India and enjoys a huge competitive advantage in terms of brand value and huge network of agents. However, there are concerns with the company like losing market share to private players, lower profitability & revenue growth compared to private players, lower VNB margins and short-term persistency ratios, but the valuation at Price to Embedded Value of 1.1 had discounted the above concerns. Nevertheless, investors must be aware that the business of insurance is long term in nature; therefore we recommend investors to stay with the company for the long term even if the company lists at a discount.
If LIC IPO lists below issue price, investors should accumulate more: GEPL Capital MD Vivek Gupta
Retail investors should subscribe to the LIC initial public offering (IPO), as it “brings a combination of market leader at cheaper valuations operating in a double-digit growth industry", GEPL Capital MD Vivek Gupta has said.
Gupta was not too worried about the slide in LIC’s grey market premium. If the price slips below the issue price on the listing day, it would make LIC more attractive and investors should accumulate more, he said in an interview of Moneycontrol.
Macquarie on LIC
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Brokerage firm Macquarie Securities India has initiated coverage on shares of Life Insurance Corporation of India ahead of the company’s listing on May 17 on the National Stock Exchange and the BSE.
LIC is expected to see a muted listed on the bourses after the biggest initial public offering in India raised Rs 21,000 crore from the public and clutch of institutional investors earlier this month.
Brokerage firm Macquaire said it has a ‘neutral’ stance on the life insurance company’s stock and a price target of Rs 1,000, which is slightly higher than the IPO price of Rs 949 per share. LIC’s IPO was subscribed nearly three times led by its policyholders and retail investors. Macquarie Securities’ analyst Suresh Ganapathy noted that LIC has consistently lost market share in the individual business owing to lack of product diversification and excessive focus on single-premium and group business.
LIC unlisted shares traded at Rs 934 apiece on Saturday
##According to the latest trends in the grey market, the company’s unlisted shares were trading at Rs 934 apiece on Saturday (May 14), a discount of Rs 15 to the upper limit of the IPO price band, as per IPO Central, which tracks the grey market premium. The grey market premium entered into the negative territory on May 11 when it was trading at a discount of Rs 5 per share to its price at the higher end of the price band. Since then, it has not been able to spring back into the positive zone. In fact, the highest premium that the stock commanded was Rs 80 per share on May 4, the opening day of subscription. Since then the grey market premium has been on the slippery ground and has declined consistently, as per IPO Central.
LIC IPO subscription
The government raised Rs 21,000 crore by liquidating 3.5 percent of its stake in the biggest initial public offer (IPO) in the history of the Indian primary markets so far. The mega IPO which opened for subscription on May 4 and closed on May 9 was subscribed 2.95 times with bids worth Rs 45,000 crore received across investor categories. The shares were allotted to the successful shareholders on May 12 at the upper end of the Rs 902-to-Rs 949 price band.
