Life Insurance Corporation of India (LIC) is set to make its stock market debut on Tuesday, May 17, nearly two weeks after the initial public offer (IPO) of India’s largest life insurance provider opened to the public on May 4. The Street is keeping its fingers crossed ahead of the listing of LIC shares as the grey market trends indicate a dull mood.
LIC gave up its premium in the grey market, an unofficial market for unlisted securities. Dealers said LIC shares changed hands at a discount of Rs 16-19 in the grey market on Monday, a day ahead of the big listing on bourses BSE and NSE.
Here’s what the grey market trend looks like ahead of the LIC IPO listing today:
|May 13||+/- Rs 10|
|May 12||+/- Rs 10|
|May 11||+/- Rs 10|
|May 10||Rs 30|
|May 9||Rs 40|
|May 7||Rs 60|
|May 6||Rs 50|
|May 5||Rs 65|
|May 4||Rs 65|
|May 3||Rs 85|
|May 2||Rs 85|
|Apr 30||Rs 90|
|Apr 29||Rs 75|
|Apr 28||Rs 45|
|Apr 27||Rs 25|
|Apr 26||Rs 25|
|Source: IPO Watch|
The government raised Rs 21,000 crore by selling 3.5 percent of its holdings in the largest initial public offering (IPO) in the history of India’s primary markets.
The massive LIC IPO, which opened for subscription on May 4 and ended on May 9, was oversubscribed 2.95 times, with bids totaling Rs 45,000 crore coming in from various investor groups.
The government had fixed the issue price of LIC shares at Rs 949 apiece for allotment to investors. LIC policyholders and retail investors have got the shares at a price of Rs 889 and Rs 904 apiece, respectively, after taking into account the discount offered.
So far, the amount mobilised from the Paytm IPO in 2021 was the largest ever at Rs 18,300 crore, followed by Coal India (2010) at nearly Rs 15,500 crore and Reliance Power (2008) at Rs 11,700 crore. LIC had last month reduced its IPO size to 3.5 percent from 5 percent decided earlier due to the prevailing choppy market conditions.
Even after the reduced size of over Rs 20,557 crore, the LIC IPO is the biggest initial public offering ever in the country.
Prior to the bidding process, LIC raised Rs 5,627 crore by allocating 5.9 crore shares to anchor investors. As much as 71 percent of the life insurance major’s anchor book was subscribed by domestic mutual funds.
Apart from domestic mutual funds, marquee investors, domestic insurance companies, corporates and NPS participated in the anchor allotment.
Meanwhile, in April government sources told CNBC-TV18 that the LIC IPO mop-up was not factored in for the budget estimates of divestment for the current financial year. This means that the proceeds of the LIC IPO could be a bonus for the government’s divestment target for the financial year 2023.