GIC’s ₹ 11,370-crore IPO Fully Sub­scribed, LIC Puts in ₹ 4k cr

The Economic Times - - Companies: Pursuit Of Profit - Shilpy.Sinha@ times­

Mum­bai: Gen­eral In­sur­ance Cor­po­ra­tion Re’s ini­tial pub­lic of­fer­ing of ₹ 11,370 crore was fully sub­scribed on the third day on Fri­day, with Life In­sur­ance Cor­po­ra­tion tak­ing the largest share of the is­sue.

LIC has in­vested ₹ 4,000 crore in the IPO, ac­cord­ing to peo­ple aware of the mat­ter. As per the In­sur­ance Reg­u­la­tory and De­vel­op­ment Au­thor­ity guide­lines, an in­sur­ance com­pany can­not in­vest more than 5% in another in­sur­ance com­pany.

The gov­ern­ment raised ₹ 10,000 crore through an of­fer for sale and GIC Re raised ₹ 1,500 crore fresh cap­i­tal by di­lut­ing 14.22% at a price range of ₹ 885₹ 912 in one of the largest IPOs of fi­nan­cial ser­vices firms.

Cit­i­group, Axis Cap­i­tal, Deutsche Eq­ui­ties, HSBC Se­cu­ri­ties and Ko­tak Mahin­dra Cap­i­tal were the lead man­agers for the is­sue.

“LIC al­most bailed out the is­sue, which got sub­scribed 1.3 times,” said one of the per­sons, who did not wish to be iden­ti­fied.

The is­sue was sub­scribed 1.37 times. Em­ployee quota was sub­scribed 0.99 times till 4 pm on Fri­day. The is­sue re­ceived bids for 16,50,34,624 shares while 12,47,00,000 shares were on of­fer. The quota for qual­i­fied in­sti­tu­tional buy­ers was sub­scribed 2.25 times while both re­tail and non-in­sti­tu­tional in­vestor quo­tas were sub­scribed 48% each

“In­sti­tu­tional in­vestors may not get the full amount they sub­scribed for since QIB is sub­scribed 2.25 times,” said GIC chair­man Alice Vaidyan. “From mar­ket point of view, we will be sec­ond largest pub­lic sec­tor com­pany in fi­nan­cial ser­vices sec­tor. We com­pleted the is­sue process within four months of start­ing the process, which I think is a great achieve­ment.”

Fi­nan­cial ser­vices com­pany IIFL said in a re­port, “The core un­der­writ­ing busi­ness has wit­nessed a dra­matic turn­around, ev­i­dent from the fact that com­bined ra­tio dipped below 100% in Q1 FY18. The bedrock of GIC Re’s con­vic­tion re­mains pru­dent risk se­lec­tion and rig­or­ous risk man­age­ment which has helped the com­pany min­imise net losses even dur­ing catas­tro­phes.”

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