The largest share offering on the Indian main markets since the beginning, amounting to Rs 20,557 million, is open for subscription until 9 May. Retailers can bid on the issue even on Sunday, an unusual move aimed at attracting investors.
According to data from BSE, investors made an offer for 22.214.171.1245 shares or 1.1 times compared to 16.20.78.067 shares offered in the subscription before 12 noon on Sunday 8 May.
Of the five categories, only the quota for eligible institutional buyers (QIBs) was fully subscribed, while investors bid for only 67 percent of the allotment.
Quotas for retailers, employees, policyholders and HNI investors were fully written. Part of the policyholder was registered 4.8 times and then 3.6 times the subscription for employee allocation.
The issue is entirely an offer to sell about 22.13 million shares of shares from the government of India, which owns 100 percent of the insurer, but will only release about 3.5 percent of the company.
The company will sell its shares in the range of 902-949 rupees but has given its policyholders a 60 rupees discount per share, which will be offered in the issue. Qualified employees and retail bidders will receive a 45 rupee discount per item.
The company has reserved 50 percent of the net issue for eligible institutional bidders (QIBs), with non-institutional bidders (NIIs) receiving 15 percent of the issue. The remaining 35 percent of the shares have been allocated to retail bidders.
The Indian Life Insurance Company is valued at Rs 6 lakh crore, which is approximately 1.12 times its intrinsic value (EV) of Rs 5.4 lakh crore. That’s fair to their registered peers, brokers said.
AUM LIC jumped by 10 percent to Rs 37,46,404.47 at the end of the financial year 2021 from Rs 34,14,174,57 million the year before. The company’s net profit went to 2,974.14 million rupees from 2,710.48 million rupees.
For the period ended 31 December 2021, LIC had a total AUM of Rs 40,90,786.78 million and reported a profit of Rs 1,715.31 million.
The majority of securities brokers are good at IPO on LIC and have suggested subscribing to it. However, some have raised concerns about declining market share, an oversupply of futures sales of shares by the state.
“We believe that the listing of LIC will expand the world of investment and further increase the importance of the sector in investors’ portfolios,” said Jeferries, an international securities firm.
“It will also help investors to better monitor the dynamics of the sector as LIC releases become more frequent. LIC has recalculated pairs and is opening its products for listing,” it added.
LIC will probably strengthen its comprehensive distribution system for individual products and increase its productivity, said Ashika Verðbréfamiðlun with the rating “subscriber” on the issue.
“Obviously there is room for all the players in the industry to grow without adopting cannibalism. In the upper price range of 949 Rs, the issue is valued at a significant discount based on the valuation of the private sector,” he added.
LIC operates through 2048 branches, 113 branch offices and 1,554 satellite offices. It operates worldwide, including countries such as Fiji, Mauritius, Bangladesh, Nepal, Singapore, Sri Lanka, the United Arab Emirates, Bahrain, Qatar, Kuwait and the United Kingdom.
LIC has raised more than 5,627 million rupees from anchor investors by allocating them 5.92 million rupees to 949 rupees per share, the insurer said in listing on the stock exchange. Of this, 4.2 million shares were allocated to 15 domestic mutual funds.
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