The Reserve Bank of India (RBI) on Wednesday announced a hike of 0.40 per cent in the repo rate. Since then, a meme is becoming quite viral on social media. The meme is based on the famous scene of the superhit film Baahubali, in which Baahubali is actually stabbed in the back by his most trusted aide, Katappa.

In a viral meme on social media, Katappa has been shown as the sudden decision of RBI to hike interest rates and Hero Baahubali has been shown as the Initial Public Offer (IPO) of Life Insurance Corporation (LIC). This meme is showing the correct situation to some extent. RBI surprised everyone by announcing a hike in the repo rate on Wednesday afternoon and its impact was felt on the gray market premium (GMP) of LIC IPO.

LIC’s Gray Market Premium (GMP) was increasing gradually. It increased from Rs 72 to Rs 85 and then to Rs 105. After the opening of this IPO in the afternoon, it had reached a peak of Rs 125. However, after this RBI announced an increase in the repo rate and the GMP came down to Rs 86.
Not only on LIC’s gray market premium, but also on the stock market, RBI’s move had a big impact and the Sensex had broken more than 1,400 points at a time.

LIC’s gray market premium is not expected to remain low for long. Suvajit Ray, Head of Product and Distribution, IIFL Securities says that the prices may start rallying from tomorrow. Usually, Qualified Institutional Investors (QIBs) come to invest in an IPO on the last day. However, this time the share of QIB investors is on the very first day,” he said.

33% subscribed. It’s a pretty good performance. Apart from this, the share of retail investors has also been subscribed well on the first day. LIC’s GMP may go back to Rs 130 level by Saturday and Sunday.”

LIC’s IPO is open for bidding from May 4 to May 9. The company has kept a price band of Rs 902-949 per share for its IPO. The face value of a share is Rs 10. LIC has announced a discount of Rs 60 per share to policyholders and Rs 45 per share to retail investors.


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