LIC public offering day 3: Retail portion oversubscribed

NEW DELHI: The retail portion of Life Insurance Corporation of India’s ( LIC’s) initial public offering (IPO), the country’s biggest-ever, was subscribed fully in the first hour of bidding on Day 3 on Friday.

The retail individual investor (RII) category garnered a bid of more than 7.2 crore, against the 6.9 crore shares set aside for it, according to data on stock exchanges at 11:36 am on Friday.

However, the qualified institutional buyer (QIB) and non-institutional investor (NII) portion has had a tepid response. The NII portion was subscribed 50%, while subscription of the QIB portion is still lower at 40%.

The policyholder portion was subscribed more than three times, while the reserved employees’ segment was subscribed nearly two and half times.

Overall, the IPO is more than fully subscribed having received 17,98,42,980 bids, against 16,20,78,067 shares on sale.

The IPO will close on May 9. The government aims to generate about ₹21,000 crore by diluting 3.5% of its 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 and policyholders will get a discount of ₹60 per equity share.

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.

LIC has got a little more than ₹5,627 crore from anchor investors, led primarily by domestic institutions. Anchor investors portion was subscribed at ₹949 per share.

LIC reduced the IPO size from the 5% decided earlier to 3.5%, because of the prevailing market condition. Even after the reduced size of about ₹20,557 crore, it is going to be the biggest IPO ever in the country.