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LIC IPO Subscription Day 5 Updates: IPO Booked 1.73 Times So Far; Retail Oversubscribed

The Rs 20,557-crore LIC IPO remained open on Sunday for its fifth day of subscription. The initial public offering of the country’s largest life insurance company, Life Insurance Corporation of India, has been subscribed 1.73 times, receiving bids for 28.02 crore equity shares against the offer size of 16.21 crore equity shares.

LIC IPO Subscription Update as of 2:00 PM on Day 5:

– Qualified institutional buyers (QIBs) subscribed 0.67 times

– Non-institutional investors subscribed 1.19 times

– Retail individual investors (RIIs) subscribed 1.52 times

– Employees subscribed 3.68 times

– Policyholders subscribed 4.85 times

– Total subscribed 1.73 times

The Reserve Bank of India had asked all application supported by blocked account (ASBA)-designated bank branches to remain open on Sunday, in order to ensure smooth banking system during the subscription period. ASBA is the mechanism through which investors apply for shares in a public issue.

LIC IPO: Basic Details

The much-awaited IPO was launched on May 4 and will remain open till May 9. The government is offloading 3.5 per cent of its stake in the insurance behemoth. Investors can bid for a total of 221,374,920 equity shares. The company has fixed a price band of Rs 902-949 for the public issue. At the upper price band, the insurer will have an estimated market capitalisation of Rs 6 lakh crore. Investors can bid for a minimum of 15 equity shares (1 lot) and in multiples thereafter.

A total of 50 per cent of the IPO will be reserved for qualified institutional buyers, 35 per cent for retail investors, and the remaining 15 per cent for non-institutional investors.

Ahead of the launch of the LIC IPO, the insurer on May 2 raised Rs 5,627 crore from anchor investors. Society Generale, Government Pension Fund of Norway, Government of Singapore, Monetary Authority of Singapore, and BNP Investments, were among the foreign funds that are invested. Meanwhile, 71 per cent of the total allotment was made to domestic mutual funds (MFs), which shows a disclosure by the company.

Hem Securities said, “LIC being the fifth largest life insurer globally by GWP and the largest player in the fast-growing and underpenetrated Indian life insurance sector is trusted brand and a customer-centric business model. It has a presence across India through an omni-channel distribution network with an unparalleled agency force.”

It added that the company being the largest asset manager in India with an established track record of financial performance and profitable growth looks decent investment avenue. “Hence, we recommend subscribe on issue.”

LIC IPO: Grey Market Premium

According to IPO Watch, the unlisted shares of LIC are currently trading at a premium of Rs 60 in the grey market over the upper band price of Rs 949 apiece. It translates into a listing gain of five per cent. It means the shares in the grey market are trading at Rs 1,009 apiece. The grey market premium gets fluctuated based on the sentiments in the markets.

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