LIC IPO is a good opportunity for retail investors: Experts

New Delhi: The initial public offering (IPO) of Life Insurance Corporation of India hit the market on Wednesday and will remain open for bidding till 9th May 2022. Stock market experts are bullish on the IPO and the grey market is also giving positive signals.

Ravi Singh, Head of Research, Share India, said in the grey market LIC IPO is trading at around Rs 1200-1250 which is around 25 to 30 per cent higher than the issue price. This is giving confidence to the retail investors to invest in LIC IPO. Singh said anchor investors have already invested Rs 5,620 crore in LIC IPO. There is also a discount for retail investors and policyholders. Retail investors and employees to get the benefit of 5 per cent and policyholders will get the benefit of 7 per cent.

The price band for LIC IPO is Rs 902-949 per equity share. LIC policyholders will get a discount of Rs 60 per equity share, while retail investors and employees will get a discount of Rs 45 on each share. Investors can bid for a minimum of 15 shares (one lot) for Rs 14,235 at the upper end of issue price.

The Centre plans to raise Rs 21,000 crore by diluting a 3.5 per cent stake in LIC.

D K Mishra, a stock market expert, said the LIC IPO price band is good where the subscription is going to be very good. "If you see the size of the LIC market coverage, LIC has captured around 65 per cent market share of the total life insurance policies of this country."

"They have got a huge network of nearly 3,500 branches or satellite office and they have got a huge number of agency agents employed approximately 13.5 lakhs agents are working for the LIC and overall asset size is quite huge," he said.

Mishra said retail investors who are interested in the equity market and who are willing to go into the real earnings share market it is a good opportunity for them to invest.

Talking about the posting gain, Mishra said "we expect it should not be less than 1.5 times of the issue price that's what is our minimum expectation." So it is a good opportunity that retail investors who should come forward and invest if they want to earn profit.