The Government of India's offer for sale (OFS) in Life Insurance Corporation of India (LIC) received a decent response from investors, with the issue being subscribed 2.27 times at the final day of bidding on Wednesday. The Centre sold a total of 82.22 crore equity shares, translating to a 6.5% stake in the country’s largest insurer.
This included the base offer of 31.62 crore shares and an additional 50.59 crore shares under the oversubscription option.
The non-retail portion of 74 crore shares received bids for 129.48 crore shares and was booked 1.57 times. The clearing price for this segment was fixed at Rs 383.10 per share, above the floor price of Rs 382.
The retail portion of 8.22 crore shares received bids for 5.76 crore shares, translating into a subscription of 70.14%. Retail investors were allotted shares at Rs 373.10 per share after a discount of Rs 10 to the non-retail clearing price. Overall, the OFS received bids for 187.15 crore shares, resulting in an overall subscription of 227.61 % of the retail allocation.
The Centre on Monday announced the sale of up to a 6.5% stake in LIC through the OFS route. The floor price was fixed at Rs 382 a share, a discount of about 10.7% to Monday's closing price of Rs 428. At the floor price, the government was likely to raise more than Rs 31,000 crore, making it one of the country's largest equity share sales.
The Department of Investment and Public Asset Management (DIPAM) had said the government would initially divest a 2.5% stake, with an option to sell an additional 4% under the greenshoe option if investor demand remains strong. "The government offers to disinvest 2.5% equity with an additional 4% as a greenshoe option. The floor price has been fixed at Rs 382 per share. This will help achieve minimum public shareholding (MPS) milestones ahead of schedule," DIPAM said.
Before the OFS, the Centre held 96.5% in LIC which will now decline to 90%. LIC was listed in May 2022 through a Rs 20,500-crore IPO, the largest in India's capital market history. The government had diluted a 3.5% stake through the issue, although the original plan was to divest at least 5%.
