The initial public offering (IPO) of Life Insurance Corporation of India (LIC), the country’s biggest life insurer, was subscribed 1.33 times so far on the third day of bidding. The issue had got fully subscribed towards the end of the second day (Thursday) led by policyholders and employees.
The LIC issue was subscribed 1.33 times, NSE data at 5:15 pm showed. The policyholder’s segment was subscribed 3.89 times while the employee’s portion was subscribed 2.96 times, the data showed.
Apart from these, the qualified institutional buyers (QIBs) were subscribed 0.55 times, the non-institutional investors were subscribed 0.69 times and the retail segment was subscribed 1.19 times, the data showed.
The LIC IPO will be available for public subscription till Monday, May 9, 2022. It will also remain open this weekend to enable people to participate. This is perhaps for the first time the special dispensation is granted to any public offer.
The price band of LIC IPO is fixed at Rs 902-949 per share and the company is offering a discount of Rs 60 per share for its policyholders and Rs 45 apiece for retail investors and LIC employees.
LIC IPO: Open Saturday and Sunday
LIC public offer will remain open for a subscription even on weekends 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. Earlier bidding was allowed on May 7 (Saturday) only.
To facilitate this, the Reserve Bank of India (RBI) directed all ASBA-designated bank branches to remain open to the public on Sunday to facilitate the processing of applications for LIC’s initial public offering.
LIC IPO Concerns
Motilal Oswal highlighted the risks and concerns of the LIC IPO. They said: “Adverse variation in persistency metrics could have a material effect on LIC’s financial performance. Secondly, change in regulations could adversely impact business.”
It further said that LIC is highly dependent on individual agents. If LIC is unable to retain and recruit individual agents on a timely basis and at a reasonable cost, there could be a material adverse effect on its operations.
If actual claims experienced and other parameters are different from the assumptions used in pricing its products and setting reserves for its products, it could have a material adverse effect on LIC business, the brokerage firm said.
“A significant proportion of LIC’s total new business premiums are generated by participating products and single premium products, and any significant regulatory changes or market developments that adversely affect sales of such products could have a material adverse effect on its business,” they added.
