By now you all will know that lic IPO market will be available from 4th May to 9th May, and will be listed on 17th May. But the breaking news is that first, the Government of India has diluted its 5% stake to Rs. 60,000-Rs. 65,000 crore, the government is diluting just a 3.5% stake and only Rs. 20,557 crore has been raised.
Yes, both the issue size and the valuation have come down. And this news is absolutely true. Now the question is, is the pressure of the government coming under the pressure of launching the IPO? And if so, is it correct? Is it still right to invest in LIC IPO? – Let's see –
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The biggest question is, why did the government work on the issue size and also the valuation? Why Small IPO?
Government representative Tuhin Kanta Pandey, Secretary, Department of investment and Public Asset Management (DIPAM), gave justification saying,
“LIC share sale is of the right size considering the current market environment. This will not exclude capital flows given the existing constraints. ,
Justifying the low valuations, Pandey said how 10 investment bankers and valuers have given this valuation by doing an “apple to orange comparison” because there was no benchmark to look at.
But, according to market analysts, this size reduction is due to market volatility and record-high inflation global, and domestic.
When LIC's valuation was high, LIC dethroned Reliance from the post-data market cap, but in the current scenario, it would be at number 5. It remains to be seen whether this low valuation will attract retail investors?
Meanwhile, LIC employees are marching against LIC IPO.
Seeing the privatization of government property LIC, many LIC employees and trade unions are protesting all over the world. They say that the government should take back this decision.
The All India Insurance Employees Association (AIIIA) also went on strike for two days on 28 March and 29 March. They do not believe that the country's biggest IPO – is the first step to privatizing LIC and it will compromise the interest of the policyholders. In fact, the LIC Employees Association is also in support of AIIEA and they have said that 1.25 lakh insurance workers will join the AAP protest and go on strike on the day of the IPO launch, and they will join 10 central trade unions – opposing the new labor codes and the government's privatization spree.
Now what will be the result of the ongoing protest, only time will tell, but the process of issuing LIC IPO is going on.
It is managed by 10 Book-Running Lead Managers –
SBI Caps, Kotak Mahindra Capital, ICICI Securities, Axis Capital, JM Financial, Goldman Sachs, JP Morgan, Citigroup, Nomura, and Bank of America Securities.
What Next? LIC IPO
LIC IPO is also the largest IPO in the country at ‘this valuation'. Interestingly, as soon as the date of LIC IPO was announced, its Gray Market Premium (GMP) increased by 80% on a day. Interestingly, this GMP trend is the largest ever produced in India.
Going by the GMP trends and data from analysts, it is known that the opening of the LIC IPO will be very good. Looking at the GMP, it is being said that LIC's stock can open on 5% ‘up' equal to the opening day – cross the 1000 mark.
This is a matter of an opening day, but the future price of LIC stock will depend on its policy and management process.
So if you are still in a dilemma – whether you should invest in LIC IPO or not, then you can wait after listing and invest after analyzing the stock. In this market volatility, my yeh technique is quite handy and the risk is also controlled to a great extent. You must have seen that Adani Wilmar and other successful IPOs also gave a considerable amount of time to buy buyers at the ‘IPO rate' before moving up. So now you think about when you should invest – in IPO or after IPO.