The initial public offer (IPO) of Life Insurance Corporation of India (LIC) will close today. The mega share sale has been subscribed 2.71 times its total issue size till 3:09 pm today. The IPO received 44.61 crore shares against the issue size of 16.20 crore shares. The grey market premium (GMP) or the additional price over the upper end of price band of the issue currently trades at Rs 40, according to IPO Watch. It has been falling gradually since the IPO started.
The GMP, which stood at Rs 85 on May 2 has fallen by Rs 45 or 52.9 per cent till date. The IPO opened on May 4. The price band of the IPO is Rs 902- Rs 949. With GMP trading at Rs 40, the stock is likely to be listed in the market at (Rs 949 plus Rs 40) Rs 989 per share. This amounts to a 4.21 per cent premium over the issue price. The insurance major plans to raise Rs 21,000 crore from investors.
On May 2, the state-owned firm collected Rs 5,620 crore from anchor investors, signaling strong interest ahead of the share sale. Norwegian wealth fund Norges Bank Investment Management and the Government of Singapore were among the subscribers to the anchor book.
LIC IPO fully subscribed on Day 2; Policyholders 3 times, employees 2.14 times, retail 0.91 times
Besides other global funds, domestic mutual fund houses such as HDFC Mutual Fund, SBI, ICICI and Kotak also participated in the anchor issue of LIC. Over 20 investors had expressed interest in subscribing to the anchor book, according to reports. LIC planned to raise up to Rs 5,630 crore at the upper end of the price band from the anchor investors.
The state-run insurer has reserved 59.29 million shares for anchor investors. The government is offloading 3.5 per cent stake or 22,13,74,920 shares in the insurer through the IPO.
Stake of the government, which currently stands at 100 per cent, will be trimmed to 96.50 per cent after the IPO.
The allotment of shares will be done on May 12, 2022. Lot size of the IPO is 15 shares bidding for which one will have to spend Rs 14,235. A retail individual investor can apply for up to 14 lots or 210 shares by spending Rs 1,99,290. The stock is likely to be listed on BSE and NSE on May 17.
