The net issue of the mega ₹21,000-crore IPO of Life Insurance Corporation (LIC) was subscribed 2.95 times as of the last day, receiving bids for 47.83 crore equity shares against the IPO size of 16.2 crore.

While the portion set aside for policyholders was subscribed 6.11 times, employees bid 4.39 times the allotted quota and retail investors 1.99 times, and the reserved portion of qualified institutional buyers was booked 2.83 times and that of non-institutional investors’ 2.91 times.

The Centre, through this mega IPO — which was open from May 4 to 9 — has offloaded 3.5 per cent shareholding in the insurance behemoth. It maybe recalled that the anchor book — which was opened on May 2 – saw bids of over ₹7,000 crore against the anchor book portion of ₹5,360 crore.

Deepening capital market

Post the closure of the IPO on Monday, Tuhin Kanta Pandey, DIPAM Secretary, said that it has been met with “tremendous success from all categories of investors”.

“This issue response is a reflection of Aatmanirbhar Bharat. This issue has been domestically (by domestic investors) lifted. This IPO will deepen capital market and facilitate large number of investors to own shares in public sector organisations like LIC,” Pandey said.

This remark is a clear pointer that the response of foreign investors to the IPO has been muted and belied expectations. Pandey also said the allocation will happen on May 12 and the listing on May 17. “Last few days, investors have been taking their own calls. We have facilitated investors in all possible ways. Let us hope everything goes well on listing day,” he said.

“The IPO was a record in terms of the number of applications, exceeding 60 lakh,” Pandey told BusinessLine. He also added that over ₹6,000 crore of application money flowed into the issue over the weekend.

Sanjay Malhotra, Secretary DFS

Sanjay Malhotra, Secretary DFS | Photo Credit: KAMAL NARANG

‘Good returns’

Department of Financial Services Secretary Sanjay Malhotra said the pricing has been done on LIC’s core intrinsic value. “Let us look at it from a medium to long term. We are hopeful that the value offered would give good returns,” Malhotra said.

Asked about the balance between policyholders and investors that LIC is likely to take post its listing, Malhotra said LIC would take decisions primarily on the best interest of policyholders while at the same time factoring in shareholders’ interests. Right balance would be maintained, he added.

On whether the behemoth will make its entry into the indices on the day of listing, Pandey replied in the negative. He said entering into benchmarks like Sensex or Nifty50 would have to wait for the respective processes to be completed and that it would not happen on the first day of listing.

Record number of applications

Meanwhile, merchant banking sources said that LIC IPO had received 73.37 lakh applications, which is a record in the Indian capital markets history.

Related Topics