Mumbai: The initial public offering (IPO) of ICICI Prudential Life Insurance Co. Ltd was subscribed 15.78% on Monday, the first of the three-day offering.Through the public issue, which will close on Wednesday, parent company ICICI Bank Ltd is looking to trim 12.63% stake and raise about 6,056 crore.

As of 5:30pm on Monday, the IPO received applications for 20.89 million shares against 132.37 million shares, stock exchange data showed. The institutional investor category was subscribed 5.8%, while the non-institutional category comprising high-net-worth individuals was subscribed 4.4% or 0.04 times.

Retail investors, whose investments cannot exceed 2 lakh per individual, subscribed to 24.93% of the 57.12 million shares on offer, data showed.

The portion reserved for shareholders was subscribed 20.15%. This portion is for existing ICICI Bank shareholders as on 7 September and looking to bid additional shares apart from their original applications.

ICICI Bank Ltd on Friday raised 1,635.33 crore by selling shares as part of the 6,056 crore public issue. India’s largest private sector bank by asset size sold 48.96 million ICICI Prudential Life shares to institutional investors via an anchor allotment. The sale took place at 334 per share, the upper end of the 300-334 price band for the IPO.

At the upper end, ICICI Prudential Life will be valued at 47,955 crore.

The anchor book is the portion of the IPO that bankers allot to institutional investors on a discretionary basis. Anchor book subscription opens a day before the launch of an IPO and acts as an indicator of institutional investor interest. Investors in the anchor book have to remain locked-in for 30 days from the allotment.

In the grey market, ICICI Prudential shares are quoting at a premium of 20-22 per share, but off the highs of 25-26 that was seen over the weekend, while an application for minimum of 44 shares was trading at around 900-1,000, said two dealers on condition of anonymity.

“The issue seems to be a good one from long-term perspective. However, given the huge size and pricing huge listing gains may not be seen. People are not applying for many applications," said one of the dealers mentioned above, adding that the market may watch out for subscription in the HNI (high net worth individuals) space for more cues.

Typically, a grey market is used to lap up shares by HNIs, for booking listing gains.

ICICI Prudential Life filed its IPO proposal with the Securities and Exchange Board of India (Sebi) on 18 July and received the regulator’s approval on 2 September.

Parent firm ICICI Bank Ltd is looking to divest a 12.63% stake in the life insurance arm through the offer-for-sale (OFS) route. Prudential Corp. Holdings Ltd is also expected to trim its stake in insurance company by up to 5.83% after its listing as part of the revised terms of the joint venture (JV) agreement.

ICICI Bank and Prudential agreed to shed their stake in the insurer with a floor of 54% and 20% stake, respectively, to make the listed entity compliant with the Sebi’s minimum public shareholding norms.

Currently, ICICI Bank holds 67.52% and Prudential 25.83% as the two promoters of India’s largest private sector life insurer.

The rest is held by others, including billionaire investor Azim Premji’s firm M/s Hasham Traders (4%) and Compassive Investment Pte. Ltd (2%), a wholly-owned unit of Temasek Holdings.

This was after ICICI Bank sold 6% stake in November 2015 which valued the insurance company at 32,500 crore. The total deal value stood at about 1,950 crore.

Also read: Is ICICI Prudential IPO a precursor to more insurance floats?

Following the initial share sale, ICICI Bank’s stake in the insurer will drop to 54.89%, leaving little room for ICICI Bank to shed more stake as part of the foreign investment policy in the insurance sector.

Investment banks ICICI Securities Ltd and Bank of America Merrill Lynch have been hired as the tier-I banks to manage the share sale.

Other banks hired to manage the share sale are CLSA India Pvt. Ltd, Deutsche Equities India Pvt. Ltd, Edelweiss Financial Services Ltd, HSBC Securities and Capital Markets (India) Pvt. Ltd, IIFL Holdings Ltd, JM Financial Institutional Securities Ltd, SBI Capital Markets Ltd and UBS Securities India Pvt. Ltd.

ICICI Prudential Life posted consolidated revenue of 8,884.37 crore for the three months to June. Its net profit stood at 404.9 crore for the same period, according to the information available in the red herring prospectus.

The company reported consolidated revenue of 20,227.94 crore for full-year fiscal 2016 compared with 33,955.76 crore in fiscal 2015. Its net profit for FY16 stood at 1,652.72 crore compared with 1,640.35 crore in the year prior, as per the prospectus.

As of 31 December 2015, ICICI Prudential Life had assets under management of 1.01 trillion.

Close