LIC’s largest IPO in India at ₹21,000,000, 3 times subscribed

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MUMBAI: The initial public offering (IPO) of Rs 21,000 crore for life insurance giant LIC received a huge response from domestic institutions and was almost three times oversubscribed by the time it closed on Monday. LIC’s policyholders, employees, retail investors, high net worth investors (HNIs) and domestic financial institutions contributed significantly to the offering. On the other hand, foreign funds – despite initial talk of strong demand from this group of influential investors – turned out to be mostly scammers, according to final underwriting figures.
At the press conference following the broadcast, Tuhin Kanta Pandey, Secretary of the Government’s Divestment Branch, Dipam, who was responsible for LIC’s IPO, described the offering as a problem “Atmanirbhar because it was domestic investors, especially Indian financial institutions, who saw it through. The issue had opened on May 4 and, unlike other offers in the past, investors were able to bid for the IPO on all days in between – including Saturday and Sunday – as the government had made arrangements specials to ease the usual last-day rush. seen in most high profile offerings.
According to BSE data, the share reserved for LIC policyholders was subscribed 6.1 times, for eligible employees it was 4.4 times, for retail investors almost 2 times, for HNIs 2.9 times and for institutional buyers 2.8 times. The IPO received offers for almost 48 crores of shares against 16.2 crores offered. A day before the opening of the IPO for all investors, the government had placed LIC shares worth around Rs 5,600 crore with a group of domestic and foreign investors. It was the first divestiture offering in the history of the Indian capital market that had anchor investors.
Thanks to this IPO, the largest in India, the government sold 3.5% of its shares in the major life insurance company. Under the offer pricing policy, policyholders of LIC will get a discount of Rs 60 per share on the final price, while retail investors will get Rs 45.
Interestingly, as the mega IPO drew to a close on Monday, the gray market premium (GMP) in the unofficial equity market evaporated. At the start of the IPO on May 4, the GMP was at Rs 60-65 per share, which on the second day reached a high of Rs 80. On Monday afternoon, however, the GMP was at a low of Rs 5 and by evening he had disappeared. The GMP for any IPO is an indicator of the premium the stock might command upon listing. LIC is expected to list on May 17.



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