LIC IPO gets subscribed 34 per cent in first three hours of opening

With a price band of Rs 902-949 per equity share, the IPO is valued at Rs 21,000 crore, the highest so far in the Indian market

LIC has already cornered a little over ₹5,627 crore from anchor investors led primarily by domestic institutions. File Photo

The initial public offering (IPO) of the Life Insurance Corporation of India (LIC) opened for subscription on Wednesday. The public issue will close on May 9. The issue is an offer for sale of equity shares by the Government of India, which owns 100 per cent stake in LIC, but will offload only 3.5 per cent stake of the company. The IPO size was reduced to 3.5 per cent from 5 per cent decided earlier due to prevailing market conditions.

Good response

The IPO attracted bids for 5.53 crore equity shares against the IPO size of 16.20 crore shares — subscribed 34 per cent within three hours on the first day of bidding. As of 1 pm, retail individual investors’ portion was booked 0.37 times and non-institutional investors’ category was subscribed 0.08 times. Employee reserved and policyholder reserved portions were subscribed 0.59 times and 1.19 times, respectively, reports NDTV.

The price band for the IPO is Rs 902-949 per equity share. LIC policyholders will get a discount of Rs 60 per equity share, while retail investors and employees will get a discount of Rs 45 on each share. Investors can bid for a minimum of 15 equity shares and then in the multiples thereof.


Also read: Why LIC IPO may not be as attractive as it’s made out to be

The company has reserved 50 per cent of the net issue for qualified institutional bidders (QIB), where non-institutional bidders (NIIs) will get 15 per cent of the issue. Remaining 35 per cent portion has been allocated to retail bidders.

In an unusual move, the IPO will take subscriptions even on Saturday (May 7). The move is aimed at attracting more investors.

Centre dilutes 3.5 pc stake

The Centre plans to raise ₹ 21,000 crore by diluting a 3.5 per cent stake in LIC. The company said that it has already garnered around ₹ 5,627 crore from anchor investors ahead of the IPO. At Rs 21,000 crore, the valuation of the IPO is the highest in the Indian market. Before this, the highest fundraise was seen in Paytm IPO last year at ₹ 18,300 crore and Coal India in 2010 at ₹ 15,200 crore.

The LIC was formed by merging and nationalising 245 private life insurance companies on September 1, 1956, with an initial capital of ₹ 5 crore.

Also read: Grossly undervalued, LIC’s IPO is the most controversial ever