As LIC IPO debuts at a 9% discount, here are 4 updates you need to know

LIC finally transitioned into a listed public company on Tuesday. The government's long-standing task of disinvestment in LIC is now officially done.

The IPO application process was open between May 4 to May 9 for interested investors and policyholders to apply for LIC's shares. Given the LIC's solid reputation as India's most-trusted insurance company, investors hoped to make a bumper gain today after LIC listed on the stock market. But hey, you forgot that this is the stock market we are talking about - a place where there is a lot of uncertainity.

LIC shares debuted on the stock market at a discount of 9% i.e the stock market prices were about 9% lower than what the applicants paid during the application process. Though it is not the situation that investors expected, here is how the shares are performing:

Shri Mangalam Ramasubramanian Kumar, Chairperson, @LICIndiaForever and Shri Tuhin Kanta Pandey, Secretary @SecyDIPAM along with Shri @ashishchauhan, MD&CEO, @BSEIndia and others ringing the opening bell to mark the Listing of Life Insurance Corporation of India on 17th May, 2022 pic.twitter.com/oHRTpSUoDm

— BSE India (@BSEIndia) May 17, 2022

1. PRICING DEBUT

The applicants paid about Rs 949 for each share of LIC during the IPO application process, but when LIC got listed today, the shares listed at lower prices. The company got listed at Rs 865 on BSE and Rs 872 on NSE, ie a discount of about 8.5-9%.

2. PRICE MOVEMENT

The LIC shares were priced on the lower side when the day began, but it has beenb rising slowly since then. Here's how the prices are moving: 

• At 9.30 am - Rs 865
• At 10 am - Rs 902
• At 11 am - Rs 898
• At 12 pm- Rs 893
• At 1 pm- Rs 886
• At 2 pm- Rs 879

3. WHY THE TEPID LISTING? 

If you remember, the government delayed the LIC IPO launch from March 2022 to May 2022 to avoid the negative impact of the unstable global markets and the impact of the Russia-Ukraine war. But, even in May 2022, stock markets seem to be shaky due to many reasons:

1. The higher-than-ever inflation rates
2. The Dollar-Rupee trade gap being highest in the last 20 years (Rs 77/$)
3. Crash in commodity prices last week 
4. The global trend where the stock markets have been crashing since the last two weeks

4. NOW WHAT? 

The LIC IPO summed up ??????Discount listing ??Wait & watch to see if buyers awaken#MEMES #IPO pic.twitter.com/9JZI6VLU5J

— Shaina Gulati (@shainagbedi) May 17, 2022

As per Parth Nyati, Founder of Tradingo, those who applied for LIC's shares should maintain a stop-loss (ie. hold their shares till the price reaches a minimum price) of Rs 800. If the market price breaches Rs 800, then investors can sell. New investors should take advantage of this lowered price and accumulate shares for the long term.

Mohit Nigam, Head of Portfolio Management Services at Hem Securities said that LIC will perform well in the long run and investors can even wait for shares to dip further to invest in them.