LIC IPO: Policyholder portion oversubscribed within hours

Policyholders have responded enthusiastically to the initial public offering (IPO) of Life Insurance Corporation of India (LIC) as the portion of the issue reserved for them was oversubscribed within hours on the first day.

By 1:45 PM, the policyholder portion was subscribed 1.38 times. Against the 2,21,37,492 shares reserved for eligible policyholders, bids were submitted for 3,04,91,625 shares. The issue came with a discount of ₹60 per share for the policyholder portion.

The retail investors and employee portions of the LIC IPO also saw substantial interest on the opening day. Around 43% of the retail portion of the issue was subscribed with bids submitted for 2,98,16,430 shares, compared to 6,91,79,663 shares on offer in the segment. Bids were received for 11,10,720 shares in the employee portion, against the 15,81,249 shares reserved under it, making up 70% of the portion. Retail investors and LIC employees can avail of a discount of ₹45 per share in the issue.

Qualified institutional buyers (QIBs) and non-institutional investors (NIIs) are yet to turn up en masse for the LIC IPO, with both portions subscribed 3% and 9%, respectively. By the time of reporting, the entire issue was subscribed 41%.

The LIC IPO, which opened today and will continue till May 9, is the largest public issue in the country till date. The issue size was revised to 3.5% on account of the market conditions. Centre will offload 221,374,920 shares at face value of ₹10 through the IPO to try and raise around ₹21,000 crore.

The price band for the issue has been pegged at ₹902 to ₹949. The insurance behemoth is expected to be valued between ₹5.71 lakh crore and ₹6 lakh crore after the issue. Bidders can place bids for lots of 15 shares and in multiples thereof. The IPO will be open for retail investors on Saturday, May 7, too in order to garner maximum investor participation in the issue.

Before the IPO opened, LIC raised over ₹5,000 crore from anchor investors as the portion saw strong participation from domestic mutual funds as well as foreign fund houses. The insurer allotted around 59.3 million shares to 123 anchor investors at Rs 949 apiece.

Over 70% of the anchor portion was allotted to domestic mutual funds such as SBI Mutual Fund, SBI Life Insurance, ICICI Prudential, Nippon Life, Kotak Mahindra Life Insurance, L&T Mutual Fund, Aditya Birla Sun Life, Axis Mutual Fund, HDFC Trustee, Tata Investment Corporation, UTI Mutual Fund and Sundaram Mutual Fund. The key foreign investors that participated in the anchor book included the Government of Singapore, Government Pension Fund Global, BNP Investments LLC, Monetary Authority of Singapore, Societe Generale, Invesco India, and Saint Capital Fund.