LIC's great offer sails through

LIC’s great offer sails through – Mail Bonus

Mumbai | New Delhi: The country’s largest public offering since its inception, by the Life Insurance Company (LIC), was subscribed 2.95 times on the last day of bidding on Monday, backed by strong demand from retail investors, employees and policyholders that millions of ordinary Indians regard as their main shield. risk of life.

The £ 21.008 million issue, in which the federal government sold 3.5% of the insurance giant, received an offer for 478.3 million shares in exchange for the 162 million that were for sale (excluding the anchor book), according to exchange documents. The case received more than 7.3 million applications, breaking a 14-year-old record in Reliance Power’s stock sales Anil Ambani, which drew 4.8 million applications in 2008.

The success of the share sale was largely driven by policyholders and LÍK employees, who were among the issue’s largest subscribers. However, the participation of foreign institutions in the issue was modest in comparison.

“This case has shown that our capital markets and our investors also have capabilities,” said Tuhin Kanta Pandey, secretary of the Department of Investment and Public Asset Management (DIPAM), which oversees the state’s share sales program. “We can not rely solely on foreign institutional investors. Investment companies are also welcome, but this issue has largely been lifted domestically. It will help to deepen the stock market.”

Items reserved for policyholders were listed 6.12 times and employee quotas 4.40 times. Bids in both of these categories ensured that the case sailed through on the second day.

“Participation from tier-2 and tier-3 cities was high for the LIC IPO. We can attribute this to the deeper involvement of agents and policyholders of the LIC,” said Girirajan Murugan, CEO of FundsIndia. “We also received a lot of applications from the newly established Union Territories.

The bulk of applications from institutional, HNI and retail investors came in the last two days of the IPO process. Items that were set aside for the retail category were listed 1.99 times. The proportion of non-institutional or financial assets (HNIs) and eligible institutional buyers witnessed subscriptions 2.91 times and 2.83 times. The majority of domestic brokers had recommended that customers subscribe to IPOs by referring to cheaper valuations than peers in the private sector. The issue was sold in the price range 902-949 INR each.

Pricing was based on intrinsic values ​​as well as growth potential, but not on the basis of daily fluctuations, said Sanjay Malhotra, secretary of the financial services department.

LIC prices in the unofficial gray market have fallen in recent days. The spread on the gray market, which is considered an indicator of pre-listing sentiment, above the upper issue price, INR949, decreased from over INR 85 before the opening of shares to below INR 40 on Monday.

Pandey said the shares are likely to be distributed on May 12 and should be on investors’ demat accounts by May 17. The registration would be on May 17, he added. “There are many geographical factors that affect the market. But this is how it is. Let’s hope everything goes well. We are hopeful and confident about the listing date,” said Pandey.

The previous record for the amount raised in a tender on the domestic market was about

parent, in 2021.

The company raised 18,300 million in November last year. State-run miner

rose 15,199 crore in 2010. Life’s IPO in 2021 saw the largest number of applications after LIC and Reliance Power.

Subscriptions were opened for the five-day issue of LIC on May 4th. About 35% of the total shares in the offering are reserved for retail investors, while 10% have been earmarked for LIC policyholders. They were offered a discount of 60 per share, while retail investors and employees received a 45 discount. The offering was an offer for sale of up to 221.4 million shares from the Government of India. For the first time, a bidding process for the LIC issue was opened on Saturday to make it easier for retail investors to participate. Also, all bank branches nominated ASBA (application supported by a locked amount) applications were held open to the public on Sunday.

LIC last week raised $ 5,627 from 125 anchor investors by allocating 59.3 million shares in 949 each, the upper end of the price range, to pre-IPO sales. Domestic mutual funds dominated the anchor book. Foreign investors who participated in the anchor distribution were Societe Generale, the Norwegian State Pension Fund, the Government of Singapore, the Monetary Authority of Singapore and the Ghisallo Master Fund.

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