LIC IPO: Subscribed 1.03 times on day 2; policyholders portion subscribed 3.11 times

The Initial Public Offering (IPO) of Life Insurance Corporation of India (LIC) that opened for bidding on Wednesday, May 4, 2022, was subscribed 1.03 times by the day end on the second day for bidding, i.e., Thursday, April 5, 2022.

According to data from BSE, the company fetched bids for 16,68,60,765 equity shares as against the issue size of 16,20,78,067 shares. LIC IPO is the biggest public offering in the country.

Qualified Institutional Buyers (QIBs) portion of the issue was subscribed 0.40 times, while the Non-Institutional Investors and Retail Individual Investors (RIIs) were subscribed 0.47 times and 0.93 times, respectively. At the same time, the section reserved for employees was subscribed 2.22 times and policyholders by 3.11 times. Employees have placed bids for 35,03,400 equity shares against 15,81,249 equity shares on offer while policyholders have placed bids for 6,89,06,265 equity shares against 2,21,37,492 shares.

The country's largest life insurer's public issue will remain open for subscription till May 9, 2022. The allotment of shares to the Demat account of bidders will take place by May 16, 2022, and the IPO will list for trading on May 17, 2022.

LIC has fixed the price band of Rs 902 to 949 per Equity Share for its maiden public offer. Investors can bid for a minimum of 15 Equity Shares and in multiples of 15 shares thereafter. The LIC has offered a discount of Rs 45 per share to Retail and Eligible Employee Category and Rs 60 per share to Policyholder Category. With this IPO, the government is looking to divest its 3.5 per cent stake in the insurer by selling 22 crore 13 lakh shares. The Government aims to raise around Rs 21,000 crore through IPO.

The proceeds from the stake sale after deducting expenses and taxes will be paid to the government—the selling shareholder. LIC expects that the proposed listing of its equity shares will enhance its visibility and brand image.

LIC is recognized as the third-strongest and 10th most-valuable global insurance brand as per the Insurance 100 2021 report released by Brand Finance. LIC has a diverse portfolio of insurance and investment products to cater to the needs of individuals. The company is well-placed owing to its distribution network comprising of over 13 lakh agents, several partners and alternate channels, its trusted LIC brand value, and 65 years of lineage. Moreover, LIC is backed by its strong financial track record and experienced management team.