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LIC IPO fully subscribed on Day 2

LIC is selling shares in India's biggest IPO ever (AP)Premium
LIC is selling shares in India's biggest IPO ever (AP)

  • LIC IPO: Analysts say LIC shares are being offered at a significant discount to peers so downside from here seems limited

Despite volatile stock markets, LIC IPO, the country's biggest-ever public offer, has seen a good demand from investors. The government aims to generate about 21,000 crore by selling 3.5 per cent stake in the insurance behemoth. The IPO, which opened on May 4th, will close on on May 9. Bidding for LIC IPO will also remain open on Saturday, May 7. LIC has fixed the price band at 902-949 per equity share for the issue. There is reserved portion for eligible employees and policyholders. Eligible employees and retail investors will get a discount of 45 per equity share, while policyholders will get a discount of 60. Ahead of the IPO, LIC had mopped up a little over 5,600 crore from anchor investors.

05 May 2022, 06:28:07 PM IST

LIC IPO fully subscribed

The IPO of LIC was fully subscribed on Day 2. As of 06:24 pm on Day 2, was 100% subscribed. Here are subscription status of different segments:

Qualified Institutional Buyers (QIBs) - 0.40

Non Institutional Investors - 0.46

Retail Individual Investors (RIIs)- 0.91

Employee Reserved - 2.14

Policyholder Reserved - 3.02

05 May 2022, 06:06:39 PM IST

ASBA designated branches to remain open for public on May 8, 2022 (Sunday)

ASBA designated branches to remain open for public on May 8, 2022 (Sunday) to facilitate processing of applications for LIC IPO, the RBI said.

“The Government of India, in order to facilitate bidding for LIC IPO, has requested that all bank branches designated to process ASBA (Application Supported by Blocked Amount) applications may be kept open for public on May 8, 2022 (Sunday). The matter has been examined and it has been decided that banks may keep all their ASBA designated branches open on May 8, 2022 (Sunday) for the above purpose," the RBI said in a notification. 

05 May 2022, 05:24:48 PM IST

LIC IPO to remain open on Saturday, Sunday

LIC public offer will remain open for subscription even on weekend to enable people to participate in the mega IPO of the state-owned insurer. This is perhaps for the first time the special dispensation is granted to any public offer. The issue period also includes bidding on Saturday, May 7, 2022 and Sunday, May 8, 2022, LIC informed exchanges. To facilitate this, Reserve Bank of India (RBI) directed all ASBA-designated bank branches to remain open for public on Sunday to facilitate processing of applications for LIC's initial public offering. The offer will close on May 9 (Monday).

05 May 2022, 03:00:21 PM IST

Listing of shares will enhance LIC's credit profile: Moody’s

“As a listed company, LIC will face more demanding disclosure requirements, resulting in increased transparency over its operations, and encouraging it to prioritize profitable underwriting and risk management. This will, in turn, boost its capacity to generate and grow capital internally. We see the arrival of external shareholders with experience of the insurance industry as a further key benefit of the IPO. We believe the presence of foreign stakeholders will bring particular benefits in the areas of capital adequacy, financial flexibility and governance standards, enhancing LIC’s credit profile," Moody's. 

05 May 2022, 02:20:02 PM IST

LIC IPO is credit positive for India's life insurance sector: Moody's

“We expect post-IPO improvements in LIC’s operating performance and profitability to drive comparable changes across the wider life insurance sector. This is because as India’s dominant life insurer, LIC often sets the trend for pricing and policy terms. The country’s privately owned insurers have already been preparing for the prospect of future profitable growth opportunities, as premium growth continues alongside the government reforms of state-owned insurers (which include LIC’s IPO). In FY 2020, 4 of the 24 life insurers raised capital, and we expect more such transactions, as well as more M&A deals and IPOs. These will improve the Indian insurance sector's capital adequacy and financial flexibility in the months ahead," Moody's said. 

05 May 2022, 01:58:45 PM IST

LIC IPO is a key milestone: Upside AI

“2021 was the year of IPOs for India. With 65 companies collectively raising about 1.2 lakh crore, it was the highest amount in a calendar year for India. The LIC IPO becomes important as it is one of the most important institutions in India. Synonymous with insurance in India, it carries trust with its name. As they provide special discounts to the LIC employees as well as unitholders, it will potentially tap into a very large section of the market that so far might not have invested in IPOs. The LIC IPO brings transparency to its consumers, as it will be accountable to the government as well as the former, investors, and exchanges. While this improves the quality of corporate governance of the firm, it also shall help raise a substantial amount of money for the government," said Kanika Agarrwal, Co-founder and Chief Investment Officer, Upside AI.

“Various circumstances previously like that of the Russia- Ukraine war have shaken the investors’ sentiment. Discounting for holders and employees and reevaluation to suit market conditions is a step in the right direction. The IPO has been fairly priced as govt has cut the valuation in half since the Feb DRHP, and the initial signs in the grey market seem positive as it is trading at about a 5% premium to the issue price," she added.

05 May 2022, 01:08:31 PM IST

Analysts expect LIC IPO to be fully subscribed today

“LIC looks all set to be fully sold on the second day itself, which would be a major achievement for such a large IPO," Aditya Kondawar, an independent IPO analyst, told Bloomberg.

05 May 2022, 12:29:56 PM IST

LIC IPO - Retail segment 0.75 times subscribed

As of 12:20 pm on Day 2, LIC IPO was subscribed 0.82 times. Here are subscription status of different segments:

Qualified Institutional Buyers (QIBs) - 0.34

Non Institutional Investors - 0.32

Retail Individual Investors (RIIs)- 0.75

Employee Reserved - 1.6

Policyholder Reserved - 2.5

05 May 2022, 11:49:32 AM IST

LIC IPO related inflows to support rupee: Analyst

The rupee appreciated 29 paise to 76.11 against the US dollar in opening trade today amid weakening of the American currency in the overseas market. The US Dollar extended losses this morning in Asian trade after US Fed chief said the committee wasn't actively considering a steeper 75-bps rate hike in the coming months even as inflation continues to run well above the Fed’s 2% target. “Additionally, foreign funds inflows into the local assets through the LIC IPO could also aid sentiments," said Sriram Iyer, Senior Research Analyst at Reliance Securities.

05 May 2022, 10:44:53 AM IST

LIC IPO subscription picks up pace

As of 10:40 am on Day 2, LIC IPO was subscribed 0.73 times.  Here are subscription status of different segments:

Qualified Institutional Buyers (QIBs) - 0.33

Non Institutional Investors - 0.28

Retail Individual Investors (RIIs)- 0.67

Employee Reserved - 1.4

Policyholder Reserved - 2.2

05 May 2022, 10:03:43 AM IST

Indian insurance sector is an attractive play: Wright Research

“With other massive insurance and insure-tech IPOs like Policybazaar and Star Health, India has become a leader in the Insurance IPO market. Moreover, with major listed insurance players like LIC, General Insurance, New India, SBI Life, and HDFC Life, India is now a significant market for listed insurance players. What is also extremely attractive about the Indian insurance industry is that it is underpenetrated and multiplying for the massive Indian demographic. This critical size and growth prospect make Indian insurance a fairly attractive play," says Sonam Srivasatava, smallcase manager and Founder – Wright Research.

05 May 2022, 09:45:50 AM IST

LIC shares - Latest GMP

Stock market observers are positive on the IPO and say that the grey market is also giving positive signals.In the grey market LIC IPO is quoting with a GMP or grey market premium of 60.  The price band for LIC IPO is 902-949 per equity share. Policyholders will get a discount of 60 per equity share, while retail investors and employees will get a discount of 45 on each share. 

05 May 2022, 09:41:16 AM IST

LIC IPO - Day 1 subscription details

At the end of Day 1, LIC IPO was subscribed 67%. The segment reserved for policyholders was subscribed 1.9 times, while that for employees was fully subscribed during the first day itself. The retail investor segment was subcribed 60%. 

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