Over 67% of LIC’s shares subscribed on IPO Day 1

MUMBAI: Policyholders of life insurance behemoth LIC rushed in in large numbers to apply for its shares on the first day of the IPO with the Rs 21,000-crore issue subscribed over 67% on Day 1. At close of bidding for the day, the portion reserved for LIC’s policyholders was subscribed 2 times while the Employee portion was also fully subscribed, data from BSE showed.

The retail investors’ portion was subscribed 60% while the portion reserved for non-institutional investors (also called high networth individuals) was subscribed 27% and the institutional investor category was subscribed 33%. Most institutions and HNIs usually bid on the last day of the offer.

The offer would close on May 9. On Wednesday, the merchant bankers announced that the bidding in the IPO will also remain open on Saturday but restricted only for retail investors. According to a release, the IPO received bids for nearly 11 crore shares against 16.2 crore shares that are on offer.

The government is selling a little over 22.1 crore shares of LIC through this offer for sale. In the Rs 902-949 price band for the IPO, LIC’s policyholders will get a Rs 60-per-share discount on the final price while for retail investors the discount is Rs 45-per-share.

Ahead of the opening of the IPO, LIC had allotted shares worth about Rs 5,600 crore to a host of institutional investors with SBI Mutual Fund leading. About 15 domestic MFs had picked up 70% of the anchor book while nine foreign portfolio investors together bought the rest of it.

The IPO is the biggest in the Indian market history as well as the biggest divestment by the government. At the upper end of the IPO price band, the life insurance major will have a market capitalisation of about Rs 6 lakh crore. The government is divesting 3.5% of its holding in LIC through this offer.