LIC IPO fully subscribed on Day 2; policyholders bid 3.11 times, employees 2.21 times, retail 93%

The initial public offering (IPO) of public sector insurance behemoth Life Insurance Corporation of India (LIC) was fully subscribed on the second day of bidding on Thursday.

The issue was subscribed 1.03 times, drawing bids for 16.68 crore equity shares against the offer size of 16.2 crore shares on the second day of bidding.

Policyholders’ portion was subscribed 3.11 times, employees’ 2.21 times, and retail investors’ 93 percent. Qualified institutional investors subscribed 40 percent shares of their allotted quota and non-institutional investors bought 47 percent of their portion.

On Wednesday, the first day of bidding, LIC IPO was subscribed 67 per cent. Policyholders' subscribed 1.99 times the portion reserved for them. Employee reserved portion saw 117 percent subscription and retail investors subscribed 60 per cent. Non-institutional investors subscribed 27 per cent, while qualified institutional buyers bought 33 percent of allotted quota of 3.95 crore shares.

LIC has reserved 10 per cent of the issue size for policyholders and 5 per cent for employees. The IPO will have Rs 60 per share discount for its policyholders. LIC has reserved up to 35 per cent of its total IPO size for retail investors.

On April 23, 2022, the LIC board gave its nod to cut down the issue size to 3.5 per cent from 5 per cent. It means that the government will dilute only 3.5 per cent of its shares worth Rs 21,000 crore compared to 5 per cent shares announced earlier.

According to the revised DRHP, the government planned to raise an amount of Rs 21,000 crore by selling around 22 crore shares which is equivalent to a 3.5 per cent stake.