LIC’s Rs 21,000 Crore IPO Oversubscribed: 10 Points

LIC subscription will end on 9th May.

New Delhi:
A record Rs 21,000 crore initial public offering (IPO) was oversubscribed by Life Insurance Corporation of India (LIC). As of 10:57 am today, the IPO was booked 1.09 times, as investors bid for 17.64 crore shares till the end of bidding on the third day of subscription for India’s largest public issue, while there were 16.20 million on offer. Compared to crore shares, the exchange data showed. LIC fixed the initial price band from Rs 902 to Rs 949 per share.

Here’s your 10-point cheat-sheet for this big story:

  1. The portion set aside for policyholders was subscribed 3.30 times, employees 2.40 times, retail investors 1 times, non-institutional investors 0.49 times and qualified institutional buyers 0.40 times.

  2. LIC membership, which closes on May 9, is offering a discount of Rs 45 per share to employees and retail investors. A discount of Rs 60 per share will be offered to LIC policyholders.

  3. The state-insurer’s mega IPO will be open for subscription on Saturday and Sunday as well.

  4. The Rs 21,000 crore valuation for the IPO will be the highest ever valuation in the Indian market. Prior to this, the highest fund raised in Paytm’s IPO last year was Rs 18,300 crore and in 2010, Rs 15,200 crore was raised in Coal India.

  5. The country’s largest insurer has reduced the size of its IPO to 3.5 per cent from the earlier fixed 5 per cent due to the prevailing market conditions.

  6. LIC has been giving information about the IPO for several months through various channels including print and TV advertisements. It has also approached its policyholders to inform about the share sale through SMS and other means.

  7. Moody’s Investors Service said LIC’s IPO was credit positive for India’s life insurance sector.

  8. The demand for IPO continued amid hike in interest rates by the Reserve Bank of India and the US Federal Reserve.

  9. The insurance company had raised around Rs 5,627 crore from anchor investors before the IPO.

  10. LIC was formed on 1st September 1956 by merging and nationalizing 245 private life insurance companies with an initial capital of Rs 5 crore.

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