LIC IPO: Anchor Investors Portion Oversubscribed As Sovereign Wealth Funds Take Part: Report

LIC, which is on course to raise Rs 21,000 crore IPO, eyes to raise up to Rs 5,630 crore at the upper end of the price band from anchors

New Delhi: The much awaited initial public offering (IPO) of Life Insurance Corporation of India (LIC) has started rolling.

On Monday, the listing portion of the anchor investor of the LIC has been oversubscribed due to strong demand, quoting sources CNBC TV-18 reported on Monday. The official data, however, has not been announced yet.

Sovereign wealth funds of Norway and Singapore, such as Norges Bank Investment Management and GIC are likely to have anchored the public issue.

The IPO, which is touted to be the biggest issue in the country, opened on Monday for anchors. For general investors (public), the issue will open on May 4 (Wednesday) and will continue till May 9 (Monday).

According to the report, LIC, which is on course to raise Rs 21,000 crore IPO, eyes to raise up to Rs 5,630 crore at the upper end of the price band from anchors.

The state-run insurer has reserved around 5.92 crore shares for the anchor portion.

The capital market regulator, Securities and Exchange Board of India (Sebi), has given permission to the government to dilute 3.5 per cent of stake in LIC through the IPO.

The central government earlier had announced to sell 5 per cent stake in the LIC for the IPO, but was the size was trimmed to 3.5 per cent last month due to volatile market conditions.

Now, the Centre is eyeing to raise around Rs 21,000 crore. However, the amount is substantially lower than its earlier projection of Rs 60,000 crore.

The price band of for the listing is fixed at Rs 902-Rs 949 per equity share.

The company’s embedded value, which means measure of consolidated shareholders value in an insurance firm, was estimated at Rs 5.4 lakh crore in September.

The evaluation was done by a global actuarial firm Milliman Advisors.