LIC IPO fully subscribed on day 2; offer closes on May 9

LIC’s public offer, the country’s biggest-ever IPO, was fully subscribed on the second day of bidding on Thursday.

Against 16,20,78,067 shares on offer, 16,25,35,125 bids were received, making the public issue fully subscribed, as per data on stock exchanges as of 6.24 p.m.

Of the total, the policyholders’ portion was subscribed a little over three times, while that for employees was subscribed 2.14 times.

Qualified Institutional Buyer (QIB) and Non-Institutional Investor (NII) portion has received a tepid response so far. Non-institutional investors’ segment was subscribed 46%, while QIBs’ portion was slightly lower at 40%.

Retail individual investors picked up nearly 91% of the 6.9 crore shares set aside for this segment.

The initial public offering (IPO) will close on May 9.

The share sale is through an offer-for-sale (OFS) of up to 22.13 crore equity shares. The shares are likely to be listed on May 17.

The government aims to generate about ₹21,000 crore by diluting its 3.5% stake in the insurance behemoth.

LIC has fixed the price band at ₹902-949 per equity share for the issue. The offer includes a reservation for eligible employees and policyholders. The retail investors and eligible employees will get a discount of ₹45 per equity share, while policyholders will get a discount of ₹60 per share.

LIC public offer will remain open for subscription even on weekend to enable people to participate in the mega IPO of the state-owned insurer.

This is perhaps for the first time the special dispensation is granted to any public offer.

Earlier bidding was allowed on May 7 (Saturday) only.

To facilitate this, Reserve Bank of India (RBI) directed all ASBA-designated bank branches to remain open for public on Sunday to facilitate processing of applications for LIC’s initial public offering.

State-owned LIC’s Initial Public Offering (IPO), the country’s biggest ever offer, opened for subscription by retail and institutional investors on Wednesday.

The government, in order to facilitate bidding for LIC IPO, has requested that all bank branches designated to process ASBA (Application Supported by Blocked Amount) applications may be kept open for public on May 8, 2022 (Sunday), RBI had said in a statement on Wednesday.

“The matter has been examined and it has been decided that banks may keep all their ASBA designated branches open on May 8, 2022 (Sunday) for the above purpose,” it had said.

Generally, ASBA is the mechanism through which investors apply for shares in a public issue.

LIC reduced its IPO size to 3.5% from 5% decided earlier due to the prevailing choppy market conditions. Even after the reduced size of about ₹20,557 crore, LIC IPO is going to be the biggest initial public offering ever in the country.

So far, the amount mobilised from the IPO of Paytm in 2021 was the largest ever at ₹18,300 crore, followed by Coal India (2010) at nearly ₹15,500 crore and Reliance Power (2008) at ₹11,700 crore.

LIC was formed by merging and nationalising 245 private life insurance companies on September 1, 1956, with an initial capital of ₹5 crore.

Its product portfolio comprises 32 individual plans (16 participating and 16 non-participating) and seven individual optional rider benefits. The insurer’s group product portfolio comprises 11 group products.

As of December 2021, LIC had a market share of 61.6% in terms of premiums or gross written premium, 61.4% in terms of new business premium, 71.8% in terms of the number of individual policies issued and 88.8% in terms of the number of group policies issued.