On Tuesday, the shares of insurance giant Life Insurance Corporation of India (LIC) debuted on the stock exchanges on a sour note, trading 8.62 percent lower than the issue price. On the BSE, the LIC scrip started at Rs 867.20, down 8.62% from the issue price of Rs 949. It began 8.11 percent lower at Rs 872.00 on the National Stock Exchange (NSE).
Investors responded well to LIC's Rs 21,000 crore blockbuster initial public offering (IPO), which was subscribed 2.95 times following a marathon 6-day subscription period from May 4-9. The shares reserved for qualified institutional buyers (QIBs) were subscribed 2.83 times, while non-institutional investors were subscribed 2.91 times, and retail individual investors (RIIs) were subscribed 1.99 times. Apart from that, the policyholder’s segment was 6.12 times subscribed, while the employee’s segment was 4.40 times enrolled.
For allotment to investors, the issue price of LIC was fixed at Rs 949 per unit. After the discount, all policyholders and retail investors received the shares for Rs 889 and Rs 904 per share, respectively. The government had offered policyholders a discount of Rs 60 per share, and retail investors and LIC staff a discount of Rs 45 each.
Through the IPO, the government sold approximately 22.13 crore shares or a 3.5 percent stake in LIC. The issue's price range was Rs 902-949 per share. On May 12, however, investors were given shares at the top of the price band.
The LIC IPO, India's largest to date, was subscribed by 2.95 times, with individual and institutional investors leading the way, although foreign investor participation was low. The life insurance giant had raised approximately Rs 5,627 crore from anchor investors before the IPO.
The life insurance company had raised approximately Rs 5,627 crore from anchor investors prior to the IPO. Because of the unstable market conditions, the state-run insurance company lowered the size of its IPO from 5% to 3% last month. The profits from the LIC offer account for approximately a third of the government's disinvestment target of 65,000 crores for this fiscal year.
LIC IPO LIVE Update:
LIC shares were down 6.56 percent over the issue price on the BSE index at 11:06 a.m. The stock was trading at Rs 884.60 on the NSE, down 6.79 percent.
