LIC IPO: QIB quota fully subscribed on last day
NEW DELHI: Shares reserved for qualified institutional buyers ( QIB), including banks and mutual funds, in the LIC’s initial public offering (IPO) were subscribed fully on Monday morning, taking the overall subscription of the issue to a little more than two times.
Against 3,95,31,236 reserved, 4,61,62,185 bids were received, reflecting a subscription of 1.17 times, according to data posted on stock exchanges at 12:12 pm.
Non institutional investors’ portion was subscribed 1.38 times.
Retail individual investors bid for 118.9 million shares as against 69 million shares set aside for this segment, translating into oversubscription of 1.72 times.
Of the total, the policyholders’ portion was subscribed 5.39 times, while that for employees was subscribed 4 times.
The overall LIC issue was subscribed 2.05 times. Against 16,20,78,067 shares on offer, 33,19,04,280 bids were received. 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.
With the IPO, which closes later in the day, the government aims to generate about ₹21,000 crore by diluting 3.5 % stake in the insurance behemoth. LIC reduced its IPO size to 3.5% from 5% decided earlier because of the prevailing choppy market conditions. Despite the reduced size, LIC IPO is going to be the biggest 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.
The company’s product portfolio comprises 32 individual plans (16 participating and 16 non-participating) and seven individual optional rider benefits.
The insurer’s group portfolio comprises 11 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.