The share allotment of India's biggest IPO will be initiated on May 12 i.e. tomorrow. While the government received 47,83,67,010 (47.8 crore) bids for 16,20,78,067 (16.2 crore) shares offered to qualified institutional buyers, non-institutional investors, individual retail investors, employees, and policyholders, the demand for India's insurance behemoth seems to have died down in the unregulated grey market. The LIC shares are selling at a premium of just ₹10, about over 85-90% fall from over ₹92 last month before the subscription date, the latest data on IPO Watch shows. The LIC IPO will be listed on the bourses on May 17, subject to regulatory approvals.
This is around a ₹20 dip from yesterday alone. The demand for the LIC in the unofficial grey market started dwindling amid negative sentiments across global markets. The grey market premium is not an accurate indicator of a stock price always and may vary as per market conditions on listing day. However, if one goes by the GMP, the LIC IPO could list at around ₹959 (₹949 +₹10), thereby having a very moderate opening in the stock market.
DIPAM secretary Tuhin Kanta Pandey has, however, said that LIC IPO received tremendous response from all categories of investors from policyholders and others like retail and QIBs. "The LIC IPO is expected to deepen the capital markets. Hope that everything goes well on listing day,” he said.
The issue has been subscribed 2.95 times on the final day in what could be seen as a healthy response from the investors even though participation from the FIIs remained subdued. The policyholder bucket has been subscribed 6.12 times, while the employees' portion saw bidding of 4.40 times. Retail investors bid 1.99 times, and the non-institutional investors' portion was subscribed 2.91 times. QIBs quota was filled 2.83 times.
The anchor portion was subscribed 77.41%, and the LIC was able to raise ₹4,355.9 crore by allocating 4.5 crore shares. There were a total of 5.92 crore shares on offer at the allocation price of ₹949 apiece.
The offer, which carries a price band of ₹902-949 apiece, closed on May 9. In an otherwise unusual move, the IPO issues accepted bids even on Saturday (May 7) and Sunday (May 8). Analysts said this was a move to garner maximum investors in the country's biggest IPO to date. The government is raising around ₹21,000 crore by selling a 3.5% stake in the insurance giant. The IPO is completely an offer for sale (OFS), which will see the government selling 22.13 crore (2,21,374,920) shares of ₹10 face value.
A discount of ₹45 per equity share was offered to retail and eligible employee categories, and a ₹60 per equity share discount was offered to the policyholder category. Bids were placed for 15 equity shares and in multiples thereof, with a maximum subscription amount for retail investors, employees and policyholders at ₹2 lakh.
