Chris Thomas and Nupuranand

MUMBAI (Reuters). Life Insurance Corp, despite being oversubscribed for its initial public offering of $2.7 billion, is expected to make a weak debut at Indian stock exchanges.

India valued LIC’s record-breaking IPO at 949 Indian dollars ($12.20), the high end of the specified range. From selling a 3.5% share in LIC (the country’s largest insurer), the government raised $2.7 billion.

Volatility in global markets, and selling pressure in domestic stock markets are likely factors that will impact LIC’s listing. Shares could start trading close to the IPO or at a slightly lower price.

Prashanth Tapse (research analyst, Mehta Equities) stated that the “unofficial grey premium” is now trading in negative territory due to depressed global markets.

New Delhi was originally planning to list LIC this March, but market conditions in the aftermath of the Ukraine conflict meant that it had to be deferred.

India is expected to make the offer in order to achieve its ambitious targets for selling off assets. This will be the first performance of future offerings after India’s previous large IPOs.

The issue price was between 902 to 949 rupees per unit. LIC provided a discounted of 45 rupees to retail investors and employees, while policyholders received a discount in the amount of 60 rupees.

Grey market LIC shares trade at a discount near 15 rupees compared to a premium close to 100 rupees.

Retail investors can still make profits even if shares fall on Tuesday. I believe it is a good bet because valuations are attractive. Narendra Solanki from Anand Rathi, the domestic research chief.

India’s Insurance Sector is dominated by the company, which has more than 285 million policies.

IPO MARKET SLOWDOWN

The Indian IPO markets, which experienced incredible growth between 2021 and now, have seen a substantial slowdown. EY reported Monday that this is due to geopolitical tensions and stock market volatility.

EY reported that in the first quarter 2022 the proceeds from India’s primary market were $995 million through the three largest IPOs, compared to $2.57 billion for the same period last year.

According to Sandip Khetan – Partner, Financial Accounting Advisory Services Leader and Leader of EY India – if market conditions improve, there will be a solid pipeline of IPOs. In fact, more than 20 companies had filed prospectuses for the year’s first quarter.

($1 = 77.7840 Indian dollars)