The Life Insurance Corporation (LIC) offer for sale saw strong demand from retail investors on Wednesday, with the retail portion subscribed 1.82 times its base issue size as of 3:43 pm. According to NSE demand data, the retail category received cumulative bids for 5.76 crore shares against a base issue size of 3.16 crore shares. Against the total retail issue size of 8.22 crore shares, the subscription stood at 0.7 times.
LIC shares were trading at Rs 393, above the OFS floor price of Rs 382. Retail investors and employees bidding at the cut-off price are eligible for a discount of Rs 10 per share, according to LIC’s earlier filing.
The retail subscription followed strong demand from institutional investors on Tuesday, when the government’s 6.5% stake sale in LIC drew bids worth about Rs 36,400 crore. The institutional portion was subscribed 3.32 times the base size, according to DIPAM Secretary Arunish Chawla.
The OFS includes a base offer size of 2.5% and a greenshoe option of 4%, taking the total potential sale to 6.5% of LIC’s equity. For the retail portion, 8.22 crore shares, or 10% of the total offer, were made available on Wednesday. As of 3:43 pm, retail investors had bid for 5.76 crore shares. The base retail issue size was 3.16 crore shares, which was already covered 1.82 times. However, when measured against the total retail issue size, the demand was at 70%.
"Offer for Sale in the Life Insurance Corporation of India (LIC) closed with an overwhelming response from both retail and institutional investors. The issue was over-subscribed on both days and the Government exercised its entire green shoe option. With this the public ownership of LIC has increased to 10% and it has achieved this critical milestone ahead of schedule. A total of 82,23,33,558 shares have been allocated for an amount of Rs. 31,552 crores, making it India's largest public offering ever. We thank all the investors for their enthusiastic participation and reposing their faith in us," DIPAM secretary said in an X (Twitter) post.
Institutional bids set the tone
On Tuesday, non-retail investors bid for more than 94.45 crore shares at an indicative price of Rs 383.84 per share. At that price, the bids were valued at about Rs 36,400 crore. The government later decided to exercise the oversubscription option to the extent of about 50.60 crore shares, representing 4% of LIC’s paid-up equity share capital.
At the floor price of Rs 382 per share, the full 6.5% stake sale, comprising 82.22 crore shares, could fetch around Rs 31,000 crore for the government’s disinvestment kitty.
The stake sale will help LIC move closer to minimum public shareholding requirements ahead of schedule. Sebi had given LIC time until May 16, 2027, to reach at least 10% public shareholding. The government currently holds 96.5% in the insurer.
The government had earlier sold 3.5% in LIC through its May 2022 IPO, raising about Rs 21,000 crore. The LIC OFS is one of the government’s largest stake-sale transactions in recent years and comes as public-sector divestments continue to support non-tax receipts.
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