In the grey market LIC shares slip below their issue price ahead of listing

Individual investors are still expected to make gains

Shares of Life Insurance Corporation (LIC) have slipped below their issue price in the unofficial grey market, said people in the know. Sources said shares of the insurance giant are changing hands between Rs 940 and Rs 945 in the grey market. LIC’s IPO price is expected to be Rs 949. Shares of LIC are expected to make their stock market debut on Tuesday. If grey market activity is to go by, the stock could list at a discount.

However, individual investors would still end up making some gains. The break-even point for retail and policyholders, who have applied in the IPO, is Rs 905 and Rs 889, respectively. The centre has offered a discount of Rs 45 to retail investors and employees of LIC, while policyholders are offered a discount of Rs 60 per share.

LIC's IPO, which closed on Monday, has received bids of over nearly Rs 44,000 crore and over 7 million applications, highest for any IPO in the domestic market.

The initial public offering of Life Insurance Corporation of India has received robust response from investors as the insurance major's offer has been subscribed nearly 2.9 times.

The portion set aside for policyholders has been subscribed 5.97 times, employees bid 4.31 times the allotted quota, and retail investors 1.94 times, while the reserved portion of qualified institutional buyers has booked 2.83 times and that of non-institutional investors 2.8 times, as per reports.

Though the government has brought down the issue size from 5 per cent to 3.5 per cent, it was seen as a landmark public issue in the history of the Indian capital market, being India's biggest IPO till date.

The IPO values LIC at Rs 6 trillion.

The issue offer of the LIC was in the price band of Rs 902 to Rs 949.

Also, the policyholders were offered a Rs 60 discount, while for retail investors, the discount was at Rs 45.

Department of Investment and Public Asset Management (DIPAM) Secretary, Tuhin Kanta Pandey, in a press conference on Monday, said, bidders will be allocated shares on Thursday and will be listed on stock exchanges on May 17.