LIC To Make Market Debut With Over 40 Lakh Shareholders
LIC will have the second largest shareholder base by a publicly listed Indian company.
Life Insurance Corporation of India Ltd. will list on the stock exchanges on Tuesday with the second largest shareholder base held by any Indian company.
At the time of its market debut on May 17, India’s biggest life insurer will have 40.07 lakh shareholders, according to an exchange notification. Only Yes Bank Ltd. has a bigger investor base at 43.61 lakh.
LIC’s maiden offer received 73.37 lakh applications. It’s unclear how many of these were valid as some institutional and retail investors used UPI to subscribe and that provided them an additional day after the close of IPO to confirm their bids through their banks. Market regulator SEBI has asked banks and merchant bankers to correct this loophole at the earliest, two bankers told BQ Prime on the condition of anonymity as they are not authorised to disclose details.
It's also unclear how many investors bid for shares under more than one category: retail, employee, and policyholder.
A volatile market had forced the government to reduce the stake it planned to sell to 3.5% and at a lower valuation. The LIC IPO was subscribed 2.95 times at close.
Shares set aside for institutional investors were subscribed 2.83 times, while the non-institutional segment received 2.91 times demand. The subscription for retail, employee and policyholder categories stood at 1.99, 4.39 and 6.12 times, respectively.
Nearly 39.89 lakh investors will be retail and high-net-worth shareholders, according to LIC's exchange filing.
Of these, nearly 10 lakh are LIC policyholders, said a merchant banker on the condition of anonymity. It was the policyholder category that helped the IPO sail through despite market volatility, rising rates, and foreign investors staying away.
Key Highlights
Retail investors will hold 1.72% stake in the company.
Non-institutional shareholders also include 1,075 corporate bodies, 14 trusts, and 17,304 non-resident Indians. Combined, the non-institutional category owns 2.07% of the company.
Among institutions, 19 mutual funds hold 0.80%. Many of these funds are part of the anchor book and have their shares locked in for 30 days.
59 foreign institutional investors hold 0.22%.
31 financial institutions and banks own 0.20% stake in the company.
Together, institutions hold 1.43% stake in the life insurer.
No other insurance companies participated in the IPO.
Investor Profile
The LIC IPO saw an average application value of Rs 35,000 and nearly 26% of the applicants were women, B Gopkumar, chief executive officer at Axis Securities, told BQ Prime.
The top five contributing states were Maharashtra, followed by West Bengal, Gujarat, Uttar Pradesh and Tamil Nadu, he said, citing participation on his platform.
Nearly 13% of the domestic participants were policyholders who participated in both the retail and policyholder category.
Lock-In
The lock-in for anchor investors will end on June 10, 30 days after the allotment of shares. This accounts for 26.6% of the total IPO or 0.93% of the equity and is largely held by mutual funds and trusts managing the employee provident fund.
Among the large FPIs that participated in the IPO were Singapore’s GIC Pvt. and the Monetary Authority of Singapore.