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The anchor investor portion of Life Insurance Corporation of India's (LIC) initial public offering (IPO) was oversubscribed on Monday, raising around 5,620 crore from anchor investors. The IPO of the state-owned insurer, that opened for anchor investors on Monday, will run for the public from May 4 to May 9.

The insurance company has set its price band for the initial share sale at 902 to 949 apiece. The government, which wholly owns the insurance behemoth, plans to sell a 3.5% instead of 5% due to the market condition. The LIC IPO will be a pure offer for sale (OFS).

According to market observers, LIC shares are available at a premium (GMP) of 63 in the grey market today, down from 75 yesterday. 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.

Out of the 22.13 crore shares offered for sale, around 5.93 crore shares have been reserved for the anchor investor portion. Employee reservation portion is at 1.58 million while policyholder reservation is at 22.14 million.

The size of the LIC IPO is set to be the largest so far in the country. The government targets to raise 20,557.23 crore by offloading 3.5% of its equity stake or 22.13 crore shares of LIC. This is substantially lower than the earlier projection of about 60,000 crore.

“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.


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