LIC IPO: Overall subscription at 66% on Day 1

LIC's public offer, the country's biggest-ever IPO, saw the policyholders' portion being oversubscribed on the first day itself on Wednesday, though overall subscription stood at just 66 per cent.

The government aims to generate about Rs 21,000 crore by selling 3.5 per cent stake in the insurance behemoth.

The LIC initial public offering (IPO), open for retail and institutional investors, is set to close on May 9.

The issue period also includes bidding on Saturday, May 7.

The portion reserved for policyholders was subscribed 1.9 times, while that for employees was fully subscribed during the first day itself, as per data available on the BSE.

LIC has fixed the price band at Rs 902-949 per equity share for the issue.

The offer includes a reservation for eligible employees and policyholders.

The retail investors and eligible employees will get a discount of Rs 45 per equity share, while policyholders will get a discount of Rs 60.

However, demand from qualified institutional buyers (QIBs) and non-institutional investors was muted.

The non-institutional investors' portion was subscribed 26 per cent while QIBs' portion was slightly higher at 33 per cent.

Retail Individual Investor category picked up nearly 50 per cent of the 6.9 crore shares set aside for this segment.

The share sale is through an offer-for-sale (OFS) of up to 22.13 crore equity shares.

The shares are likely to be listed on May 17.

LIC has mopped up a little over Rs 5,627 crore from anchor investors led primarily by domestic institutions. Anchor Investors (AIs) portion (5,92,96,853 equity shares) was subscribed at Rs 949 per equity share.

LIC reduced its IPO size to 3.5 per cent from 5 per cent decided earlier due to the prevailing choppy market conditions.

Even after the reduced size of about Rs 20,557 crore, LIC IPO is going to be the biggest initial public offering ever in the country.

So far, the amount mobilised from the IPO of Paytm in 2021 was the largest ever at Rs 18,300 crore, followed by Coal India (2010) at nearly Rs 15,500 crore and Reliance Power (2008) at Rs 11,700 crore.

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

Its product portfolio comprises 32 individual products (16 participating and 16 non-participating products) and seven individual optional rider benefits.

The insurer's group product portfolio comprises 11 group products.

As of December 2021, LIC had a market share of 61.6 per cent in terms of premiums or GWP, 61.4 per cent in terms of new business premium, 71.8 per cent in terms of the number of individual policies issued, and 88.8 per cent in terms of the number of group policies issued.