The initial public offering (IPO) of Life Insurance Corporation of India (LIC) has been subscribed 54 percent by 3:40 PM, on May 4, the first day of bidding. Investors have bid for 8.75 crore shares till now against 16.2 crore shares offered by the life insurer.
The LIC policyholders lead, having subscribed 1.69 times the portion reserved for them. The employee reserved portion was subscribed 91 percent, while the retail investor's portion was subscribed 52 percent.
Non Institutional investors had subscribed 22 percent of their portion while qualified institutional buyers had bid for 16 percent of their allotted quota.
LIC is India’s largest life insurer and the biggest asset manager. The government aims to raise around ₹21,000 crore through its IPO, which opened today and closes on May 9, 2022. The price band is ₹902 - 949 per share.
With continuing volatility in the global equity market, LIC had reduced the IPO size from earlier 5 percent to 3.5 percent. Even with this reduced size, the LIC IPO will be the biggest domestic issue till date.
The IPO comprises only the OFS portion, thus the company will not receive any proceeds from the issue.
It has offered a discount of ₹45 for retail shareholders and employees and a discount of ₹60 for policyholders.
LIC is the largest life insurer in India with a market share of 61.4 percent in terms of new business premium (NBP). This is around 1.59 times of the total private life insurance sector and around 6.7 times the NBP for the second-largest player in the industry.
LIC is the largest Asset Manager in India with an asset under management (AUM) of ₹40.1 lakh crore which is 1.1 times more than the AUM of the Indian mutual fund industry.
Shivam Bajaj, Founder & CEO at Avener Capital says, "Amidst the volatile environment, the revision in the LIC IPO Valuation demonstrates the keenness of the government to deliver on the IPO. The revised IPO valuation can potentially unlock a favorable opportunity for investors for wealth creation. Being a landmark issue for the nation, LIC is expected to be pinned on global portfolio watchlists."