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Despite the turmoil in financial markets, the insurance behemoth's IPO received an overwhelming response, with the issue oversubscribed nearly three times, led by LIC's over 250 million policyholders' bids for a little more than six times the shares on offer.
All categories of the public offer were oversubscribed. The portion set aside for policyholders was booked 6.11 times, employees by 4.39 times, retail investors by 1.99 times, non-institutional investors by 2.91 times and qualified institutional buyers (QIB) by 2.83 times.
As of 07:00 pm on Monday, the IPO was booked 2.95 times as investors bid for 47.76 crore shares compared with 16.20 crore shares on offer, exchange data showed. The government will raise a record Rs 21,000 crore - a third of its original target - from selling a 3.5 per cent stake in the country's top insurer.
"Tremendous response from all investors, including policyholders and others like retail and QIB, has been seen in the IPO. The LIC IPO is expected to deepen the capital markets," said Department of Investment and Public Asset Management (DIPAM) secretary Tuhin Kanta Pandey, addressing a conference at the end of the six-day subscription window on Monday.
"It shows that capacity of Indian capital market has increased substantially and it also shows that we can run our own capital market without depending on foreign investors...It is a fact that this issue has been predominately lifted by by domestic institutions," he said.
Asked about the low participation of foreign institutional investors (FII), Mr Pandey said LIC IPO is an example of Atma Nirbhar Bharat. Distant remote location investors have invested. Predominantly this issue has been domestically lifted. Foreign investors' demand, while muted, dashed last minute to bid on the mega IPO.
The DIPAM secretary said the allotment of shares to the investors will be done on May 12 and the refunds will be processed soon thereafter. Mr Pandey had said earlier that the LIC IPO will be listed on the bourses on May 17 subject to regulatory approvals. Asked about the expected market response on the listing day considering the recent slump, Mr Pandey said, "Let's hope that everything goes well on the listing day."
Ahead of the listing, Reuters reported that LIC shares were trading at a premium of fewer than 40 rupees in the grey market, down from nearly 100 rupees earlier.
Policyholders were offered a discount of 60 rupees per share, while employees and retail investors were offered 45. The price range for the issue was set between Rs 902 and Rs 949 per share.
Varun Sridhar, Chief Executive Officer of Paytm Money, said, "LIC pulled off the biggest IPO in the history of Indian Capital markets, with more than 7 million applications. On Paytm Money, we saw a surge in new account openings by 200 per cent during the LIC IPO, with a majority of accounts opened by first-time investors under 30 years of age. We congratulate LIC for the grand success."