LIC OFS gets strong response from retail investors, subscribed 1.82 times the base size
LIC’s retail offer for sale attracted strong investor interest, with the base retail issue subscribed 1.82 times. The government’s 6.5% stake sale follows robust institutional demand and will help the insurer move closer to Sebi’s minimum public s...
By Akash Podishetti, ETMarkets.com |
Agencies
LIC’s retail OFS witnessed strong demand, with the base issue subscribed 1.82 times, following heavy institutional participation in the government’s 6.5% stake sale.
The Life Insurance Corporation (LIC) offer for sale saw strong demand from retail investors on Wednesday, with the retail portion subscribed 1.82 times its base issue size as of 3:43 pm. According to NSE demand data, the retail category received cumulative bids for 5.76 crore shares against a base issue size of 3.16 crore shares. Against the total retail issue size of 8.22 crore shares, the subscription stood at 0.7 times.
LIC shares were trading at Rs 393, above the OFS floor price of Rs 382. Retail investors and employees bidding at the cut-off price are eligible for a discount of Rs 10 per share, according to LIC’s earlier filing.
The retail subscription followed strong demand from institutional investors on Tuesday, when the government’s 6.5% stake sale in LIC drew bids worth about Rs 36,400 crore. The institutional portion was subscribed 3.32 times the base size, according to DIPAM Secretary Arunish Chawla.
The OFS includes a base offer size of 2.5% and a greenshoe option of 4%, taking the total potential sale to 6.5% of LIC’s equity. For the retail portion, 8.22 crore shares, or 10% of the total offer, were made available on Wednesday. As of 3:43 pm, retail investors had bid for 5.76 crore shares. The base retail issue size was 3.16 crore shares, which was already covered 1.82 times. However, when measured against the total retail issue size, the demand was at 70%.
Institutional bids set the tone
On Tuesday, non-retail investors bid for more than 94.45 crore shares at an indicative price of Rs 383.84 per share. At that price, the bids were valued at about Rs 36,400 crore. The government later decided to exercise the oversubscription option to the extent of about 50.60 crore shares, representing 4% of LIC’s paid-up equity share capital.
At the floor price of Rs 382 per share, the full 6.5% stake sale, comprising 82.22 crore shares, could fetch around Rs 31,000 crore for the government’s disinvestment kitty.
The stake sale will help LIC move closer to minimum public shareholding requirements ahead of schedule. Sebi had given LIC time until May 16, 2027, to reach at least 10% public shareholding. The government currently holds 96.5% in the insurer.
The government had earlier sold 3.5% in LIC through its May 2022 IPO, raising about Rs 21,000 crore. The LIC OFS is one of the government’s largest stake-sale transactions in recent years and comes as public-sector divestments continue to support non-tax receipts.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
LIC shares were trading at Rs 393, above the OFS floor price of Rs 382. Retail investors and employees bidding at the cut-off price are eligible for a discount of Rs 10 per share, according to LIC’s earlier filing.
The retail subscription followed strong demand from institutional investors on Tuesday, when the government’s 6.5% stake sale in LIC drew bids worth about Rs 36,400 crore. The institutional portion was subscribed 3.32 times the base size, according to DIPAM Secretary Arunish Chawla.
The OFS includes a base offer size of 2.5% and a greenshoe option of 4%, taking the total potential sale to 6.5% of LIC’s equity. For the retail portion, 8.22 crore shares, or 10% of the total offer, were made available on Wednesday. As of 3:43 pm, retail investors had bid for 5.76 crore shares. The base retail issue size was 3.16 crore shares, which was already covered 1.82 times. However, when measured against the total retail issue size, the demand was at 70%.
Institutional bids set the tone
On Tuesday, non-retail investors bid for more than 94.45 crore shares at an indicative price of Rs 383.84 per share. At that price, the bids were valued at about Rs 36,400 crore. The government later decided to exercise the oversubscription option to the extent of about 50.60 crore shares, representing 4% of LIC’s paid-up equity share capital.
ADVERTISEMENT
At the floor price of Rs 382 per share, the full 6.5% stake sale, comprising 82.22 crore shares, could fetch around Rs 31,000 crore for the government’s disinvestment kitty.
The stake sale will help LIC move closer to minimum public shareholding requirements ahead of schedule. Sebi had given LIC time until May 16, 2027, to reach at least 10% public shareholding. The government currently holds 96.5% in the insurer.
The government had earlier sold 3.5% in LIC through its May 2022 IPO, raising about Rs 21,000 crore. The LIC OFS is one of the government’s largest stake-sale transactions in recent years and comes as public-sector divestments continue to support non-tax receipts.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
Bookmark or read stories offline -
Download ET Markets APP
Download ET Markets APP
Related Articles
LIC OFS opens for retail investors: Should you apply in insurance behemoth's offer?ADVERTISEMENT
