Finance
The country’s largest initial public offering (IPO) by the state-owned Life Insurance Corporation (LIC) is set to begin on May 4 and end on May 9.
While the price range for the share sale has been set between 902 and 949 per share, according to market observers, the insurance behemoth’s shares are currently available in the grey market at a premium of 75. (May 2).
What exactly is the grey market?
The grey market is an unofficial platform where shares of companies that have announced their initial public offerings (IPOs) are traded.
However, as the name implies, it is not a legal platform, and any transactions conducted on it are at the risk of the investor.
At the same time, the grey market premium (GMP) of a company’s share does provide insight into the demand for or popularity of an upcoming IPO.
The allotment of shares to the demat accounts of LIC IPO bidders is expected around May 16, 2022, and the shares will be listed on May 17, 2022.
The government intends to sell a 3.5% stake in LIC (down from the original 5% stake size due to market conditions), and the LIC IPO will be a full offer for sale (OFS) proposition.
Tuhin Kanta Pandey, Secretary of the Department of Investment and Public Asset Management (DIPAM), stated last week that listing LIC is part of the government’s long-term strategic vision and will significantly increase the corporation’s value in the long run.
“This (LIC IPO) is right sized, considering the capital market environment and will not crowd out capital supply given the current market environment,” Mr Pandey had said on April 27.
Even with the reduced size of approximately Rs 20,557 crore, the LIC IPO will be the largest initial public offering ever in the country, he added
The employee reservation will be 5% of the post-offer equity share capital, and the policyholder reservation will be 10% of the offer size.
