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Insurance behemoth Life Insurance Corporation of India's (LIC) initial public offer (IPO), the country's biggest-ever, witnessed full subscription of the retail portion on day three on Friday. LIC has fixed the price band at 902-949 per equity share for the issue.

LIC IPO will remain open for subscription even on weekend to enable people to participate in the mega share sale. The issue will close on Monday, May 9, 2022.

As of 4:50 pm on day 4 of the bidding, the IPO has been subscribed 1.59 times with retail investors' category booked 1.38x. Of the total, the policyholders' portion was subscribed 4.45 times, while that for employees was subscribed 3.45 times.

Qualified Institutional Buyers (QIBs) and Non Institutional Investors (NIIs) bid 0.67 times and 1.04 times respectively so far, BSE data showed.

As per market observers, LIC shares are available at a premium (GMP) of 42 in the grey market today. The share allotment is expected to happen on May 12 and the shares of the company will be listing on stock exchanges BSE and NSE on Tuesday, May 17, 2022.

The government aims to generate about 21,000 crore by diluting 3.5% stake. LIC reduced its IPO size from 5% due to the prevailing choppy market conditions. Even after the reduced size of about 20,557 crore, LIC IPO is going to be the biggest public offering ever in the country.

“Given the under penetration of insurance and improving financialization of savings, we expect LIC to maintain its market leadership position backed by robust business traction. We believe investors should subscribe to the IPO for the long term, as we are confident that the structural story for the life insurance industry remains intact as uncertainties during the pandemic have highlighted the benefits of life insurance," said B Gopkumar, MD & CEO, Axis Securities.

The offer includes a reservation for eligible employees and policyholders. The retail investors and eligible employees will get a discount of 45 per equity share, while policyholders will get a discount of 60 per share.

“LIC's embedded value, which is a measure of the consolidated shareholder's value in an insurance company, is around 5.4 lakh crores as of September 30, 2021. So, at a valuation of Rs. 6 lakh crores, the issue is priced at a Price to Embedded Value of 1.1, which is a discount compared to its listed Indian as well as global peers," said Parth Nyati, Founder, Tradingo.

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