LIC IPO: Find Out LIC Public Offer's Grey Market Premium Here

Country's biggest initial public offer (IPO) by the State-owned Life Insurance Corporation (LIC) is all set to open on May 4 and will close its subscription on May 9.

While the price band for the share sale has been set between Rs 902 and Rs 949 per share, according to market watchers, the insurance behemoth's shares are available at a premium of Rs 75 in the grey market today (May 2).

What is grey market?

Grey market is the unofficial platform where shares of those companies are traded which have announced their IPOs.

However as the name suggests, it is not a legal platform and any transaction conducted on it is done on the investor's risk.

At the same time though, the grey market premium (GMP) of a company's share does give an indication about the demand or popularity of a forthcoming IPO.

The allotment of shares to the demat account of LIC IPO's bidders is expected to take place by around May 16 and the shares are to be listed on May 17, 2022.

Government plans to sell a 3.5 per cent stake in LIC (after cutting down from the original 5 per cent stake size due to prevailing market conditions) and the LIC IPO will be a complete offer for sale (OFS) proposition.

Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey last week had said that listing of LIC is part of the long-term strategic vision of the government and will highly enhance the value of the corporation 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 after the reduced size of about Rs 20,557 crore, LIC IPO is going to be the biggest initial public offering ever in the country, he had added.

The employee reservation portion will be 5 per cent of the post-offer equity share capital, and the policyholder reservation portion will be 10 per cent of the offer size.