Did the LIC IPO get impacted by the rate hikes by the RBI?

In the last two days, the LIC IPO grey market premium or GMP has slumped from a high of Rs.125 to just Rs.65. It has been a direct outcome of the RBI decision to hike the repo rates by 40 basis points. Not surprisingly, the investment bankers to the LIC issue are the most worried. The concern was evident in the grey market price (GMP) of LIC, which on the day of the RBI announcement itself fell by as much as 50%.

In early trades on Wednesday, the GMP had soared to above Rs.125 after the solid response to the anchor placement of the shares. However, things just went awry after the rate hike announcement by the RBI. Even as of Thursday, the retail, HNI and QIB portions are still undersubscribed with only the employee and policyholder portion getting more than fully subscribed.