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