LIC IPO buy, sell or hold after IPO Listing

 What should investors do in LIC stock after IPO listing

Many Indian investors were waiting for LIC's IPO for a long time, but when LIC's IPO came in the Indian stock market, there was a mixed response from both institutional and retail investors. On final day of IPO, LIC issue was subscribed only  2.95.. Talking about the premium of the gray market, then 20rs discount price is being expected. The issue price of LIC IPO was Rs949 and now if we look at the gray market, the listing is expected to be around 929rs. Now investors who have got shares allotment in LIC IPO, they are getting confuse that what they should do ? Whether investors should buy, sell or hold LIC IPO share after its listing? Today, we will try to get answer of this question in very simple words.

Question:

Why LIC IPO was getting negative response in the Grey market?

Answer:

The less good response from foreign as well as institutional investors had given bad hit to the sentiment for the state run insurer in the grey market.  Also, from last couple of weeks there is volatility in the secondary market which is adding fuel to the fire. Even the attractive valuations of LIC IPO could not HNIs and institutional bidders, which had led to dragged grey market price into the negative space.

Adding more , LIC IPO  was the biggest ever IPO in the domestic primary market because Indian government  had sold 22.13 crore shares or  we can say that  3.5 %  stake in the company which was offering valuing it around  Rs 6 lakh crore, about 1.12 times the embedded value of Rs 5.3lakh crore.

Questions:

Should Investors buy, sell or hold LIC share after listing?

Answer:

There is no any questions that If any investor had applied LIC IPO is just for gaining listing gains then it may give disappointment but it does not mean that LIC IPO is bad or this IPO can’t give returns. I always say that Grey market premium or discount will not always be correct but in most of the cases grey market prediction proved right.  Always keep into your mind the Grey market premium or discount is always for traders those apply for IPO just for taking listing gains.

Must Read this Point:

There is no question that past few companies IPO’s had given bumper gains to their investors but Have to noticed one thing that if those IPO had given bumpers gains on Listing day then How many of investors had received allotment of shares in such IPO’s? Here you will get answer of your all questions. In oversubscribed IPO’s only lucky investors or traders get shares allotment in IPO’s . It means most of the investors get their money back into their bank accounts.

 LIC IPO Hold or sell after listing?

There is no any question on the fundamentals of LIC Company. It is a one of the good state run company having very strong fundamentals and very good and old track record. LIC is a profit making company with excellent past track record of management. The most important point is that LIC IPO price is very attractive by decreasing the size of LIC IPO. It means that Company management has left something good on table for the long term investors.  Finance ministry and Company management had taken excellent t decision by offering 45rs per share discount to the retail investors, 60rs discount for the policy holders and 45rs per share discount to their employees.

LIC is a one of the best company in the world in regard of its market share of 64% in its own country. Consider all factors , We can say that There is nothing bad with LIC company, For the long term point of view LIC is going to be one of the best investment stock pick. Due to higher valuations of Indian stock market, We are seeing good profit booking from last few weeks and it is a healthy sign for the long term point of view. Due to this market volatility , investors are may see some volatility into the LIC IPO after its listing but long term investors should not worry about this. If you will get any chance for adding more stocks of LIC at lower levels then try to add it for the long term point of view.

Final View on LIC IPO listing:

If investors will get such a strong fundamental company stock at lower levels on listing day then It will be win -win situation for them because if they will add more stocks of LIC at lower levels then in the longer term , this stock will not disappoint you . In any case we see good listing then still investors can buy this stock for longer term point of view.

It is a clearly buy recommendation on LIC IPO after listing in any situation we discussed above.

LIC IPO Price target for long term:

As per our calculations or personal view LIC is a portfolio stock and we maintain positive view on LIC for the long term price target of 1100rs+