LIC IPO fully bought, bids via banks open on Sun too
MUMBAI: The Life Insurance Corporation’s Rs 21,000 crore initial public offering was fully subscribed on the second day of the issue, with policyholders bidding for three times their allocation. The IPO has already firmed up commitments of Rs 5,627 crore under the anchor portion of the issue from domestic mutual funds and sovereign funds.
Meanwhile, Moody’s has said that LICs IPO is a credit positive for the life insurance sector and its corporation. “We expect post-IPO improvements in LIC’s operating performance and profitability to drive comparable changes across the wider life insurance sector,” said Moody’s Investor Service.
According to data released by the Bombay Stock Exchange, of the 16.2 crore shares on offer, there were bids for 16.7 crore shares as of 7 pm on Thursday. Policyholders have bid for 6.9 crore shares which are thrice the 2.2 crore shares allocated to policyholders. One reason for this oversubscription is the discount of Rs 60 per share.
Employees have bid for 35 lakh shares which are more than 2.2 times their entitlement of 15.8 lakh shares. Retail individual investors with the largest chunk of shares allocated of 6.9 crore shares have bid for close to 6.5 crore shares. Qualified institutional buyers, including foreign institutional investors, domestic financial institutions and mutual funds, are yet to utilize their entitlement fully.
QIBs have bid for 1.6 crore shares against the allocation of 3.9 crore shares. Foreign institutional investors are yet to step in as they typically put in their bids towards the issue’s close. Market-watchers pointed out that in the mega initial public offerings involving government divestments, such as the IPOs of the New India Assurance and General Insurance Corporation, LIC has been an enormous supporter of the issue. However, in the case of the corporation, the support has come from a broad-based section of investors.