LIC IPO: Day 1, 67% booked, employees and policyholders oversubscribe quota
The mega initial public offering (IPO) of Life Insurance Corporation (LIC) received a strong response from investors with 67 per cent of the shares getting sold out on Wednesday, the first day of bidding, despite the stock market plunging 2.29 per cent after the Reserve Bank of India hiked interest rates.
LIC policyholders led the subscription list, with their quota subscribed 1.99 times (199 per cent). The portion for employees was subscribed 117 per cent. The retail investors portion, meanwhile, was subscribed 60 per cent, according to stock exchange data.
While 2.21 crore shares were allotted for policyholders, there were bids for 4.40 crore shares. Employees bid for 18.53 lakh shares against their quota of 15.81 lakh shares.
The first day’s response from investors for the IPO has been strong despite the RBI’s rate hike which came after the market opened. The 1,307-point Sensex fall did not affect the IPO much, analysts said.
Non-institutional investors subscribed 27 per cent of their portion while qualified institutional buyers (QIBs) bought 33 per cent of their allotted quota of 3.95 crore shares. QIBs normally put in their bids on the last day of the IPO, investment bankers said.
Overall, there were bids for 10.86 crore shares as against the total IPO size of 16.20 crore shares on the first day, exchanges said. The issue will close on May 9.
The corporation has priced the IPO in the range of Rs 902-949 per share. It has offered a discount of Rs 60 for policyholders and Rs 45 for retail investors and employees. The size of the IPO was cut from Rs 65,000 crore to Rs 21,000 crore as the Russian invasion of Ukraine and sustained selling by foreign investors sent the stock markets into a tailspin.
Domestic mutual funds invested Rs 4,002.27 crore, accounting for 71.12 per cent of the total anchor book portion of the IPO. SBI Mutual Fund invested Rs 1,006.89 crore, becoming the largest investor in the anchor book quota.
Comments are closed.