The mega IPO by Life Insurance Corporation of India was fully subscribed on just its second day with strong response from policyholders, employees and retail investors.

According to data with exchanges, the issue was subscribed 1.03 times by 7 p.m. on Thursday. Bids were received for 16.68 crore shares as against the 16.2 crore shares on offer.

The Centre is selling 3.5 per cent stake in the life insurer and will raise about ₹21,000 crore from the stake sale at the upper end of the price band at ₹949 apiece.

Subscription so far

The policyholder quota was subscribed by an overwhelming 3.11 times, while the portion reserved for employees was subscribed 2.22 times. The retail investor portion was subscribed 0.93 times.

However, the non-institutional investor quota was subscribed just 0.47 times. The portion for qualified institutional investors saw little movement compared to the first day of the IPO and was subscribed 0.4 times. It is expected to see increased inflows only on the last day, said a source. Foreign institutional investors have bid for just 225 shares in the IPO till now.

The LIC IPO, which opened on May 4, will close on May 9.

Significantly, the issue will now remain open over the weekend including May 8 (Sunday) as well for bids between 10 a.m. and 7 p.m. The RBI has also announced that all ASBA-designated bank branches will remain open for public on Sunday for processing IPO applications.

Experts believe the IPO will continue to see more interest from investors in the remaining days.

Analysts remain positive

“The subscription opened on a positive response,” said Girirajan Murugan, CEO, FundsIndia, adding that the the valuation of the IPO is attractive to keep the issue stable. 

Ahead of the IPO, the Centre had raised ₹5,627 crore from allocating 5.92 crore shares to anchor investors.

Moody’s Investor Service on Thursday said the LIC IPO is credit-positive for the country’s life insurance sector and will also benefit the insurer.

“As a listed company, LIC will face more demanding disclosure requirements, resulting in increased transparency over its operations, and encouraging it to prioritise profitable underwriting and risk management. This will, in turn, boost its capacity to generate and grow capital internally,” it said.

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