A man cleans a Life Insurance Corporation of India (LIC) hoard before the start of a news conference on the launch of the LIC initial public offering (IPO) in Kolkata, India April 29, 2022. REUTERS/Rupak De Chowdhuri
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NEW DELHI, May 5 (Reuters) – India’s Life Insurance Corp (LIC) record-breaking initial public offering (IPO) of $2.7 billion was oversubscribed on Thursday, helped by attractive prices and later in price gains above the stock market price this month.
Investors bid for 166.9 million shares by the close of bidding on the second day of subscription for India’s largest public offering, compared with 162.1 million shares on offer, stock market data showed.
Demand for LIC’s IPO continued, while the broader stock market (.NSEI) ended flat a day after the Reserve Bank of India unexpectedly hiked interest rates ahead of a 50 basis point hike by the US Federal Reserve.
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The Indian government expects to raise up to $2.7 billion by selling a 3.5 percent stake in the country’s leading insurance company, just a third of its original target, giving it an initial value of around $78.52 Billions of dollars in what could make them one of the top five companies in the country. Continue reading
LIC set the initial price range at Rs.902 to Rs.949 per share.
The LIC subscription, which ends on May 9th, offers employees and retail investors a discount of Rs.45 per share. LIC policyholders will be offered a discount of Rs 60 per share. Continue reading
“The pricing and rebates make this offer attractive, although there is a possibility of short-term market volatility,” said Narendra Solanki, Head of Fundamental Research at Anand Rathi.
According to Moody’s Investors Service, LIC’s IPO was credit-positive for the Indian life insurance industry as the listing will boost transparency and competitiveness in a sector dominated by the state-owned insurer, which has more than 280 million policies.
However, the rating agency also said the benefits of the IPO will be limited until the government sells a substantial stake in the company, which has a market share of nearly 65%.
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Reporting by Chris Thomas, Aftab Ahmed and Nupur Anand; Editing by David Goodman and Emelia Sithole-Matarise
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