LIC IPO subscribed 2.94 times on last day, 16.2 crore equity shares issued

The Life Insurance Corporation of India’s first public offering garnered a strong reaction from investors, with the insurance giant’s offering being subscribed 2.94 times.

The Life Insurance Corporation of India (LIC) will close its first public offering (IPO) today. Until 05:00 p.m. today, the mega share offer had been subscribed 2.94 times its total issue size. The IPO attracted 47.57 crore shares versus 16.20 crore shares issued. According to IPO Watch, the grey market premium (GMP), or the additional price over the issue’s upper end of price range, is now trading at Rs 40. Since the IPO, it has been steadily declining.

The GMP, which peaked at Rs 85 on May 2, has since dropped by Rs 45, or 52.9 percent. Also, the initial public offering (IPO) began on May 4th. The IPO’s pricing range is Rs 902- Rs 949. With GMP currently trading at Rs 40, the stock is expected to be launched for (Rs 949 + Rs 40) Rs 989 per share. Since this is a premium of 4.21 percent over the issue price. Investors are expected to contribute Rs 21,000 crore to the insurance giant.

LIC IPO a success or loss?

The state-owned company received Rs 5,620 crore from anchor investors on May 2, indicating substantial interest ahead of the stock sale. The anchor book’s subscribers included the Norwegian wealth fund Norges Bank Investment Management and the Singapore government.

Domestic mutual fund firms such as HDFC Mutual Fund, SBI, ICICI, and Kotak also participated in the LIC anchor issue, in addition to other global funds. According to sources, around 20 investors expressed interest in subscribing to the anchor book. At the upper end of the price band,  the LIC IPO was expected to raise up to Rs 5,630 crore from anchor investors.

Anchor investors will receive 59.29 million shares from the state-run insurance. Through the IPO, the government is selling a 3.5 percent stake in the insurer, or 22,13,74,920 shares.

Following the IPO, the government’s stake, which presently stands at 100%, will be reduced to 96.50%.

On May 12, 2022, the shares will be distributed. Thus, the LIC IPO’s lot size is 15 shares, with a bidding price of Rs 14,235 per share. By spending Rs 1,99,290, a retail individual investor can apply for up to 14 lots or 210 shares. On May 17, the stock is expected to be launched on the BSE and NSE.

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