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Know why the success of LIC’s IPO hinges on the sentiment of the IPO market

IPO Market: The curtain has been raised on the IPO of the largest government insurance company LIC. The IPO will be open for the subscription of investors from May 4 to 9. There is a lockdown in many countries due to the Russia-Ukraine war, rising inflation worldwide and the fourth wave of Corona, so the stock market is witnessing upheaval. The government reduced the issue price by Rs 60,000 crore to Rs 21,000 crore to clear the LIC IPO fleet. However, despite this, LIC’s IPO is the largest IPO in India’s primary market.

Is LIC’s IPO expensive?
The price band of LIC IPO has been fixed at Rs 902 to Rs 949. Which is also making it an expensive IPO. LIC’s EPS (Earnings Per Share) in 2020-21 is Rs 4.70 per share. According to the upper limit of the IPO, it is seeking a valuation of 202 times its earnings. In such a situation, along with the success or failure of LIC’s IPO, the brightness of the IPO market depends.

LIC IPO success is important
If LIC’s IPO gets a great response, then again the IPO market can return to its glory as was seen in 2021. Due to the volatility in the market, companies are currently shying away from launching IPO. The stock market is witnessing volatility due to Russia and Ukraine war, fears of interest rates becoming expensive. Foreign investors are selling. Due to deteriorating sentiment, companies are not bringing IPO while many have got approval from SEBI.

Upcoming IPOs
Apart from LIC, Go Airlines Rs 3,600 crore, MobiKwik Rs 1,900 crore, SBI Mutual Fund Rs 7500 crore, Ola Rs 7,300 crore, OYO Rs 8430 crore, Pharmeasy Rs 6250 crore, NSE Rs 10,000 crore, Ixigo Rs 1600 crore, Bajaj Energy Rs 5450 crore Rupee IPO will bring in the market in 2022. Apart from these, Snapdeal, Bharat FIH, VLCC Health Care, Delhivery, Wellness Forever, Bikaji Foods, Bluestone Jewelery and Ebixcash are also coming up with their IPOs. Reliance Jio’s IPO is also being speculated to be launched in 2022. But all these companies are waiting for the response to LIC’s IPO.

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