The initial public offering (IPO) of Life Insurance Corporation of India (LIC) has been priced at the top of the price range for the issue. The issue price for the IPO has been set at ₹949 per share, shows the prospectus filed by the insurance major with market regulator Securities and Exchange Board of India (SEBI) on Friday. The price band for the issue was pegged at ₹902 to ₹949 apiece.
The issue raked in ₹20,557.23 crore, the prospectus further shows, cementing the IPO as the largest ever in the country. The offer size is subject to finalisation on the basis of allotment, the insurer clarified in the document.
The central government is planning to dilute 3.5% of its stake in LIC under its ambitious disinvestment spree to raise funds. The issue size was revised downwards from 5% on account of severe market volatility. Under the issue, 221,374,920 equity shares at a face value of ₹10 apiece are up for grabs.
The anchor portion of the LIC IPO opened on May 2, where the central government raised ₹5,627 crore as the bucket was oversubscribed.
The issue opened for the rest on May 4 and closed on May 9; bidders were allowed to submit bids even during the weekend as the government aimed for maximum investor participation. Retail investors and eligible employees were offered discounts to the tune of ₹45 per share, whereas policyholders enjoyed a discount of ₹60 per share.
The IPO was oversubscribed 2.95 times amid tremendous response from investors. The policyholder portion of the IPO has been subscribed 6.11 times, while the portion reserved for employees was subscribed 4.39 times. Retail investors bid 1.99 times the allocated bucket, and non-institutional investors’ portion was subscribed 2.91 times. The issue raised ₹43,933 crore demand against the intended offer size of ₹21,000 crore.
The allotment of shares was completed on May 12, as the Supreme Court refused to stay the IPO. The refunds to unsuccessful bidders are expected to be initiated from today, May 13, while the shares will be credited into the demat accounts of successful bidders on May 16. LIC is expected to start trading on exchanges from May 17.
However, the LIC shares are trading at a discount of ₹10 in the grey market. Demand for the shares has been dwindling in the unofficial market amid negative sentiments across global markets. The grey market premium (GMP) is not an accurate indicator of a stock price always and may vary as per market conditions on listing day. However, going by the GMP, investors may have to take a hit on their investments when the shares are listed on the bourses next week.