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The Indian government expects to raise the sum, just a third of its original target, from selling a 3.5 per cent stake in the country's top insurance company, giving it an initial value of $78.52 billion
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State-owned Life Insurance Corp's (LIC) $2.7 billion IPO, India's largest, opened to subscriptions from retail and other investors on Wednesday following strong demand from anchor investors led by domestic mutual funds.
The Indian government expects to raise the sum, just a third of its original target, from selling a 3.5% stake in the country's top insurance company, giving it an initial value of $78.52 billion.
The subscription, set to close on May 9, will offer a discount to employees and retail investors of 45 rupees per share. LIC policyholders will be offered a discount of Rs 60 per share.
The price range for the issue has been set between Rs 902 and Rs 949 per share.
After a reservation for employees and policyholders, the remaining shares will be allocated in a ratio of 50% to qualified institutional buyers, 35% to retail investors and 15% for non-institutional investors.
The final IPO price will be determined after the subscription closes.
LIC shares were trading in the "grey" market at a premium of 95 rupees, at around Rs 1,044 apiece.
To drum up demand from retail investors, in addition to heavy advertising in local newspapers, some 1.2 million field agents were dispatched across India to woo many of LIC's more than 250 million policyholders to buy the shares.
Policyholders were also flooded with text messages earlier this year recommending they open an electronic stock holding account early so they can take part in the IPO. read more
The 59.3 million shares set aside for anchor investors were subscribed at 949 rupees apiece. Norwegian wealth fund Norges Bank Investment Management and the government of Singapore joined the anchor book, along with several domestic mutual funds. read more
The government had initially wanted to list LIC in the financial year that ended March 31 but chose to delay the sale after Russia's invasion of Ukraine and the US Federal Reserve's interest rate tightening triggered a market rout.
The 66-year-old company dominates India's insurance sector, with more than 280 million policies. It was the fifth-biggest global insurer in terms of insurance premium collection in 2020, the latest year for which statistics are available.
(Reuters)