LIC IPO anchor book a massive hit; fully subscribed, garners Rs 5,620 cr

Ahead of the opening of LIC IPO on Wednesday, the anchor book of the India's largest IPO was fully subscribed on Monday, as per the official in the know of the matter. The issue that opens for institutional and retail investors tomorrow will close on May 9. 

"The anchor investor portion of LIC's initial public offering has been subscribed fully, garnering around Rs 5,620 crore," an official told news agency PTI. 

In related development, the Ministry of Finance has asked bank officials assigned with the tasks related to Life Insurance Corporation (LIC) IPO be not transferred until May 15. The move by the ministry is to ensure that LIC IPO is executed without any disruption.  

"Department of Investment & Public Asset Management (DIPAM) has requested that the bank officials identified for the LIC IPO related work should be continued tentatively up to 15th May, 2022, so as to avoid any disruption of IPO related work," read a statement from Ministry of Finance. 

The issue opened for anchor investor subscription on Monday and saw 'excellent' response, the official said, adding that the list will be uploaded to exchanges tonight. 

The government aims to raise Rs 21,000 crore and is is selling 22,13,74,920 shares in Life Insurance Corporation (LIC). The price band for LIC IPO is Rs 902-949 a share.  
The LIC share sale would be the biggest ever amount raised through an initial public offering in the Indian stock market. The previous such high fund-raising was seen in the IPO of PayTM in 2021 at Rs 18,300 crore and Coal India in 2010 at Rs 15,200 crore. 

Of the over 22.13 crore LIC shares on offer, over 9.88 crore shares are reserved for qualified institutional buyers and over 2.96 crore shares for non-institutional buyers. 

Up to 15,81,249 shares and 2,21,37,492 shares are reserved for employees and policyholders. 

While retail investors and LIC employees will get a discount of Rs 45 per share, LIC policyholders bidding in IPO would get a discount of Rs 60 a share. 

LIC would get listed and start trading on the stock exchanges on May 17. 

LIC's embedded value, which is a measure of the consolidated shareholder's value in an insurance company, was pegged at about Rs 5.4 lakh crore as of September 30, 2021, by international actuarial firm Milliman Advisors. 

Based on investor feedback, the market value of government-owned LIC has been pegged at 1.1 times its embedded value or Rs 6 lakh crore.  

With PTI Inputs