LIC IPO Day 3: Price details, what the grey market premium signals on Day 3 of bidding

The bidding for the public issue of the Life Insurance Corporation of India is underway and will remain open till 9 May. The biggest initial public offering in the history of the country, the public issue is expected to bring in the Rs 21,000 crore to the exchequer. The shares are priced at Rs 902-949 per equity share. Policyholders are eligible for a discount of Rs 60 on the LIC IPO. Retail investors and employees get a discount of Rs 45 on their bids. The public issue of LIC has received a strong response from investors. The portion set aside for policyholders has been subscribed 3.11 times, while the portion reserved for employees has been subscribed 2.22 times. Qualified Institutional Buyers (QIB) have bid for 40 percent of their allotted portion, while Non-Institutional Investors have subscribed to 47 percent of their allotted quota. What about LIC IPO’s grey market premium? The grey market premium (GMP) of the shares remains steady at Rs 65, with no change from yesterday evening. Experts believe that key secondary market indices ending around their Wednesday closing levels could be the reason behind the GMP of the insurance behemoth being steady. However, according to market observers, the LIC IPO GMP has come down from Rs 90 to Rs 65 in the last three days due to negative secondary market sentiments.  They expect that the grey market sentiment will change once the Dalal Street trade pattern reverses. Many market experts have advised investors to follow the financials of the insurance company rather than the grey market premium. They have stated that the GMP data is non-regulated and unofficial and therefore, should not be taken seriously while making any investment decision. Other details: The LIC public issue opened for subscription on 4 May. The company had raised over Rs 5,000 crore from anchor investors before the bidding. About 59.3 million shares were allotted to 123 investors at the price of Rs 949 per equity share. Marquee investors in the LIC IPO included BNP Investments LLC, Societe Generale, Invesco India, the Government of Singapore and more.