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The gray market premium for LIC is now negative.

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3 years ago

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The gray market premium for LIC is now negative.

Life Insurance Corp (LIC) shares’ grey market premium (GMP) turned negative on Wednesday, ahead of its May 17 listing.

According to a trader who did not want to be identified, the LIC GMP peaked at Rs 93-95 per share and then began to decline. On May 5, it was trading between Rs 8 and Rs 10 per share. It was extremely volatile on May 6 and 10, with a downward trend, he said. He added that it had fallen from Rs 8-9 per share to a negative Rs 15 per share on Wednesday.

The GMP has steadily declined since its peak, owing to concerns about a lacklustre response from foreign investors. Retail and domestic institutional investors were the primary buyers of the IPO. The presence of foreign investors was minimal.

Investors were also concerned by volatility, which was sparked by fears of global central banks tightening in response to higher inflation.

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While the lower valuation in comparison to peers is a positive, analysts are concerned about accumulated losses of Rs 6,028 crore, loss of market share, a lack of digital presence, and the perception that not all decisions made by the country’s largest life insurer are in line with shareholder interests.

By selling 3.5 percent of its stake in the country’s largest insurer, the government will raise Rs 20,500 crore. The stock offering began on May 4 and ended on May 9. On May 12, allotments will take place, and shares will be credited to demat accounts on May 16.

The price band had previously been set at Rs 902-949 per share by LIC, which had slashed around 60% of its issue size due to poor market conditions.

The initial public offering (IPO) was a pure offer to sell up to 221.37 million shares. For the anchor investor portion, the company set aside 59.29 million shares. The reservation portion for employees is 1.58 million, while the reservation portion for policyholders is 22.14 million. The QIB portion has a value of 98.83 million.

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“The IPO was reasonably priced.” However, investors’ moods were disturbed by volatile market sentiments. If market sentiments had remained stable, we would have seen much higher subscription across all investor categories,” said Manan Doshi, co-founder of UnlistedArena.com.

“Despite the attractive offer, the volatile market environment, low subscription, and bulky issue size are the factors generating pessimism,” he said.

Meanwhile, GMP of Delhivery Ltd, Venus Pipes & Tubes Ltd, and Prudent Corp Advisory Services Ltd were trading at Rs 8-9 a share, Rs 40-42 a share, and Rs 34-36 a share, respectively.

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Oppn seeks probe into Adani charges in US: ‘Obvious protection of PM Modi’

Published

23 hours ago

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November 21, 2024

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Oppn seeks probe into Adani charges in US: ‘Obvious protection of PM Modi’

Following US SEC charges of bribery against Gautam Adani, opposition parties criticise PM Narendra Modi and call for a JPC investigation.

As billionaire Gautam Adani faces charges in the US for alleged bribery and fraud, the Opposition on Thursday intensified its attack on the Centre over its alleged links with the Adani Group.

Gautam Adani has been charged in the US with allegedly paying $250 million in bribes to Indian officials between 2020 and 2024 to secure favourable terms for solar energy contracts. The scheme, prosecutors said, could have earned Adani’s group over $25 billion in profits.

Congress demands JPC probe

Reacting to the charges, the Congress called for a Joint Parliamentary Committee (JPC) probe into alleged scams involving Adani’s conglomerate. The party also demanded the appointment of a “new and credible” Sebi chief to investigate Adani’s financial dealings and compliance with securities laws.

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ALSO READ- At 65.2%, Maharashtra records highest voter turnout since 1995 assembly election

Congress leader Jairam Ramesh said the US Securities and Exchange Commission’s (SEC) actions highlight the failure of Indian institutions to investigate the group. “The indictment vindicates Congress’s demand since January 2023 for a JPC into the Modani scams,” Ramesh wrote on X.

He accused Prime Minister Narendra Modi of shielding Adani and claimed Congress’s “Hum Adani Ke Hain Kaun” (HAHK) series had exposed the businessman’s alleged fraud and his ties with the PM.

The fact that it has taken a foreign jurisdiction to properly investigate Adani only shows how Indian institutions have been captured by the BJP, and how decades of institutional development have been undone by greedy and power hungry leaders, the Congress leader said in another post.

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“All of this is consistent with a long record of fraud and criminality carried out with impunity with the obvious protection of the Prime Minister,” Ramesh charged.

Other Oppn leaders join attack

Other opposition leaders joined the attack. Trinamool Congress MP Saket Gokhale questioned the BJP’s involvement in Adani’s dealings and demanded an independent judicial probe.

Aam Aadmi Party leader Sanjay Singh accused PM Modi of allowing Adani to tarnish India’s global reputation.

ALSO READ- Adani Group shares plunge after US SEC charges, Adani Green down 16%

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Adani stocks latest updates

The allegations rattled markets, with Adani Group stocks plunging. Adani Enterprises fell 20 per cent in pre-open trade, while shares of Adani Ports, Adani Green, Adani Power, and others dropped between 7 per cent and 18 per cent.

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