LIC IPO: Retail portion subscribed fully on day three

The initial public offering (IPO) of the insurance behemoth Life Insurance Corporation (LIC) was subscribed fully in the first hour of bidding on day three on Friday. The Retail Individual Investor (RII) category garnered over 7.2 crore bids against 6.9 crore shares set aside for this segment, as per the data on stock exchanges at 11:36 am on Friday. The segment was thus fully subscribed.

However, the Qualified Institutional Buyer (QIB) and Non-Institutional Investor (NII) portion has been receiving a tepid response. Non-institutional investors’ portion was subscribed 50 per cent, while QIBs’ portion is still lower at 40 per cent.

The policyholder portion was subscribed over three times, while the reserved employees’ segment was subscribed nearly two and half times.

Overall, the country’s biggest-ever IPO is more than fully subscribed as it has received 17,98,42,980 bids, as against 16,20,78,067 shares on sale. The LIC initial public offering (IPO) will close on May 9.

The government aims to generate about Rs 21,000 crore by diluting its 3.5 per cent stake in the insurance behemoth. The share sale is through an offer-for-sale (OFS) of up to 22.13 crore equity shares. The shares are likely to be listed on May 17.

LIC has fixed the price band at Rs 902-949 per equity share for the issue. The offer includes a reservation for eligible employees and policyholders. The retail investors and eligible employees will get a discount of Rs 45 per equity share, and policyholders will get a discount of Rs 60 per equity share.

LIC has cornered a little over Rs 5,627 crore from anchor investors led primarily by domestic institutions. Anchor Investors (AIs) portion (5,92,96,853 equity shares) was subscribed at Rs 949 per equity share.

It has reduced its IPO size to 3.5 per cent, from 5 per cent decided earlier, due to the prevailing market condition. Even after the reduced size of about Rs 20,557 crore, the LIC IPO is going to be the biggest initial public offering ever in the country.

So far, the amount mobilised from the IPO of Paytm in 2021 was the largest ever at Rs 18,300 crore, followed by Coal India (2010) at nearly Rs 15,500 crore and Reliance Power (2008) at Rs 11,700 crore.

With PTI Inputs

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