The ₹21,000-crore LIC IPO, which opens on Wednesday, is expected to see strong retail and non-institutional investor (NII) interest on the back of good response for the ₹5,627-crore anchor book that closed on Monday, said merchant bankers handling the mega public offering.
Under the anchor book, as many as 5.93 crore shares of LIC of ₹10 each will be allotted to 123 institutional investors (both domestic and foreign) at ₹949 apiece, which is the upper end of the IPO price band of ₹901-949. Over 71 per cent of the anchor book portion came from domestic mutual funds, LIC’s stock exchange disclosure showed.
The Government is looking to shed 3.5 percentage shareholding in insurance behemoth LIC via offer for sale route in the IPO.
Marquee investors
Marquee investors who got allotments in the anchor book include Government Pension Fund Global (sovereign wealth fund of Norway) (4 per cent of anchor investor portion); Government of Singapore (2.7 per cent); Monetary Authority of Singapore (0.68 per cent) and BNP Investments LLP (8 per cent).
Bulk of the response to the anchor book came from the 15 domestic mutual fund houses who, through 99 schemes, contributed ₹4,002 crore, getting allocation of each share at ₹949.
“There has been very good demand for the anchor book. This will give very good momentum for the issue that opens on May 4 and closes on May 9. We expect pretty good response for retail and non-institutional investors segment. I think all buckets would do well. Of course, there is also separate reservation for policyholders”, said a merchant banker handling the IPO. In all, there were ten merchant bankers who were appointed for handling the LIC IPO.
Some of the domestic investors and schemes who participated in the anchor book include SBI Equity Hybrid Fund (9.22 per cent of anchor investor portion); SBI Balanced Advantage Fund (3.64 per cent); ICICI Prudential Value Discovery Fund (3.91 per cent); Kotak Mahindra Life Insurance, SBI Life Insurance, Aditya Birla Sun Life, Nippon Life, Tata Investment Corporation, Bajaj Alliance General Insurance, Axis Mutual Fund and Sundaram Mutual Fund.
However, not all mutual funds made it to the anchor book despite strong interest, sources said, adding that some of the renowned fund houses who did not figure in the list include DSP Mutual Fund, Mirae Asset Management, LIC Mutual Fund, Motilal Oswal Mutual Fund and PPFAS Mutual fund.
Merchant bankers said those not getting any allocation in anchor book can always come through the main route when the IPO is open from May 9.