LICI Post IPO review
POST IPO ANALYSIS
-Sahil Saini
India’s Biggest Insurance company-
LIFE INSURANCE CORPORATION OF INDIA
13/5/2022- LICI Grey market premium was minus ₹26. Ahead of the LICI IPO opening, shares of the insurer were available at a premium of ₹92. So, in nearly 10 days, LIC IPO GMP has tumbled around 125 percent. (Source: mint live)
17/05/2022- Listing day of LICI on NSE & BSE
Opened with a discount of 9.4% and settled ~8% negative at close!
As we witnessed massive buying momentum on the opening of IPO which is still not breached even after continues selling in the stock till the closing of markets, it makes the lows of today (i.e. INR 860) very important as per technical analysis point of view.
The psychological aspect of buyers-
There were buyers who put their money at stake and applied for IPO & remaining bull power we saw today on the first few minutes of market opening, both the bulls have their capacity to hold! Psychologically today’s low is important to watch further development in the stock. Market-wise, I am discussing further observations below.
Market Structure-
Today Indian Markets showed a good reversal pattern, Nifty50 & Bank-nifty which are the highest traded Indices in Indian markets closed above the previous 3 trading day close with a reversal Japanese candlestick pattern known as Bullish-Harami) on charts, and the Volatility index dropped 7% and mostly all the equity indices are very much positive. Market breadth also looks positive and healthy for recovery from here!
Peer Comparison-
When we compare today’s top 3 biggest competitors by market capitalization in the given picture below, it is clearly visible that LICI was relatively much weaker-
1) HDFC Life Insurance Company Ltd.
2) SBI Life Insurance Company Ltd.
3) ICICI Lombard General Insurance Co Ltd.
Conclusion-
All the three big competitors closed positively today, which shows sector-wise bullishness in the market. All major equity indices closed positively, which shows the market is trying to reverse the bearish trend which we are witnessing from October 2021. So, If I am the investor of LICI, who can understand all this information and LICI still can’t hold its low in this bullish sentiment market and can’t start recovery then, I will better change my plan of holding those shares or at least will not buy more shares.
Disclaimer-
I don’t hold any share of LICI and I am not a SEBI registered analyst or advisor. So, please do your due diligence on your own or take advice from your investment advisor. I am sharing my observation as per my analysis for educational purposes.
