LIC IPO Last Day Subscription Update: IPO Booked 2.95 Times; Retail Investors Make Record Bids

LIC IPO has seen 47.83 crore bids against offer size of 16.21 crore; retail investors make record bids with IPO subscribed 1.99 times under retail individual investors quota

LIC IPO Last Day Subscription Update: IPO Booked 2.95 Times; Retail Investors Make Record Bids

LIC IPO has seen 47.83 crore bids against offer size of 16.21 crore; retail investors make record bids with IPO subscribed 1.99 times under retail individual investors quota

The initial public offering (IPO) of Life Insurance Corporation of India (LIC) was subscribed 2.95 times on the sixth and the last day of bidding on Monday. The issue got fully subscribed towards the end of the second day (Thursday). The LIC IPO is now closed for the subscription. It remained open this past weekend to enable people to participate. This is perhaps for the first time the special dispensation is granted to any public offer.

The price band of LIC IPO was fixed at Rs 902-949 per share and the company offered a discount of Rs 60 per share for its policyholders and Rs 45 apiece for retail investors and LIC employees. LIC’s initial public offering has received 2.95 times subscription on the final day of bidding, with the portion reserved for qualified institutional buyers (QIBs) fully booked. The bids received were 47.83 crore against the offer size of 16.21 crore.

LIC IPO Subscription Update At The End of Day 6, The Last Day For Subscription:

Qualified Institutional Buyers (QIBs) subscribed 2.83 times

Non-Institutional Investors subscribed 2.91 times

Retail Individual Investors (RIIs) subscribed 1.99 times

Employees subscribed 4.40 times

Policyholders subscribed 6.12 times

Total subscribed 2.95 times

Retail Investors Make Record Bids

LIC IPO created another record, with the number of applications for the stock of the country’s insurance behemoth crossing 5.9 million on Sunday. The portion reserved for retail investors was fully subscribed on the third day and 1.59 times by the end of the fifth day of subscription. The issue has received 13.8 crore bids from retail individual investors, against 6.9 crore shares set aside for them.

It may be recalled, the initial share sale of Reliance Power in 2008 had received 4.8 million applications. Fourteen years later, LIC smashed this record as it received nearly 6 million applications from retail equity investors.

“The discount factor has evinced huge response from retail individuals," said Suvajit Ray, executive vice president at IIFL Securities, which is also associated with the distribution of the offer. “Also, the potential of offshore investors coming at a later stage via secondary market route suggests a clear upside for individual investors."

Axis Securities said: In our opinion, it is not only the attractive valuations (1.1x Mkt Cap/EV) at which the LIC IPO is priced, making it an attractive bet, but also the large market opportunity. The under penetration of the life insurance industry and the high protection gap also provides LIC a long growth runway. Additionally, the strong brand value and trust that LIC enjoys in India will ensure encouraging investor participation in the IPO."

A lot size of 15 shares or multiples can be allocated to people under retail segments. An investor can invest up to Rs 2 lakh per application. The total size of the retail allocation would be in the range of Rs 8,000-9,000 crore.

Select overseas investors (sovereign, retirement funds, and a few others), including Norges Bank, the Government of Singapore, Monetary Authority of Singapore, and BNP Investments, subscribed to the anchor book that raised nearly Rs 5,600 crore.