scorecardresearchLIC IPO subscribed 92% till now on Day 2; policyholders' portion bid 2.8 times

LIC IPO subscribed 92% till now on Day 2; policyholders' portion bid 2.8 times

Updated: 05 May 2022, 03:52 PM IST
TL;DR.

Investors have bid for 14.93 crore shares till now against 16.2 crore shares offered by the life insurer.

Investors have bid for 14.93 crore shares till now against 16.2 crore shares offered by the life insurer.

Investors have bid for 14.93 crore shares till now against 16.2 crore shares offered by the life insurer.

The initial public offering (IPO) of Life Insurance Corporation of India (LIC) has been subscribed 92 percent by 3:45 PM, on May 5, the second day of bidding. Investors have bid for 14.93 crore shares till now against 16.2 crore shares offered by the life insurer.

The LIC policyholders lead, having subscribed 2.81 times the portion reserved for them. The employee reserved portion was subscribed 1.96 times, while the retail investor's portion was subscribed 85 percent.

Non Institutional investors had subscribed 39 percent of their portion while qualified institutional buyers had bid for 35 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."

 

Article
We explain here how to subscribe for an IPO
First Published: 05 May 2022, 03:52 PM IST