scorecardresearch
Follow Us:
Thursday, May 26, 2022

Government raises $2.7 billion as LIC IPO prices at Rs 949 each; listing on May 17

Life Insurance Corporation of India shares have been priced at 949 rupees each, the state-run firm said in a prospectus filed Friday. LIC shares were offered at 902 rupees to 949 rupees apiece. Trading on the stock exchange is due to begin May 17.

By: Bloomberg |
Updated: May 13, 2022 1:44:26 pm
LIC IPO, LIC IPO share price, LIC IPO issue pricePedestrians pass a Life Insurance Corp. of India branch office in Mumbai, India, on Thursday, Jan. 20, 2022. (Bloomberg)

India raised 205.6 billion rupees ($2.7 billion) as its biggest ever initial public offering priced at the top of the range following strong demand from local investors and a last-minute dash by foreign funds.

Life Insurance Corporation of India shares have been priced at 949 rupees each, the state-run firm said in a prospectus filed Friday. LIC shares were offered at 902 rupees to 949 rupees apiece. Trading on the stock exchange is due to begin May 17.

Dubbed India’s “Aramco moment” in reference to Gulf oil giant Saudi Arabian Oil Co.’s $29.4 billion listing in 2019 — the world’s largest — the float of LIC has ended up resembling the Aramco IPO not just in scale but in its reliance on domestic investors after some foreign buyers deemed it too expensive. Foreign institutional investors stepped up their bids for the sale in the last hours before the close of subscription this week, shunning currency risks and global market uncertainties.

LIC IPO Source: Bloomberg

Besides smashing India’s record as the country’s biggest IPO, LIC’s offering is also the world’s fourth-biggest this year, according to data compiled by Bloomberg. LIC’s debut comes at a time when capital-market activities have significantly slowed globally as the war in Ukraine stokes market volatility and saps investor appetite.

Best of Express Premium

Explained: The message behind Margaret Atwood’s ‘unburnable&#...Premium
Welcome to the elusive world of crypto mining: Rohtak rig, 3 engineers, R...Premium
Explained: Sugar export curbs and their impactPremium
UPSC CSE Key – May 25, 2022: Know the Relevance of QUAD 2022 to Pangong T...Premium

Shares of LIC are trading at a discount of about 30 rupees to its IPO price in the so-called gray market, traders told Bloomberg News. The expectation for a strong debut by LIC’s shares is waning as the demand in the unregulated market, where investors bet on listing day gains, has come down over the last few days.

Retail investors and LIC policyholders were among the most enthusiastic for the offering, thanks to the discounts they were offered. The portion reserved for them was fully taken up days before the offering was closed. The anchor portion of the IPO drew in sovereign funds from Norway and Singapore while other foreign investors picked up pace only on the last day.

Overall, the LIC offer was oversubscribed by nearly three times. The money will help the government bridge a budget deficit that’s expected to widen as commodity prices soar across the world.

For the banks working on the IPO, the share sale might not give them large fees but offers glory in the league table rankings, Bloomberg News has reported. The 10 banks on the IPO received a total 118 million rupees as fees, according to the prospectus, a fraction of what they could have typically pocketed for an offering of this size.

For all the latest Business News, download Indian Express App.

  • Newsguard
  • The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.
  • Newsguard
Advertisement
Advertisement
Advertisement
Advertisement