LIC stock makes tepid market debut, lists at 9% discount to issue price

Shares of state-owned Life Insurance Corporation (LIC) made a tepid market debut today, listing at a discount of 8.62 per cent against the IPO issue price. The company offered its shares in a price band of Rs 902- Rs 949. The stock listed at Rs 867.20 on BSE. Market cap of LIC stood at Rs 5.48 lakh crore.

Total 1.5 lakh shares of the firm changed hands amounting to a turnover of Rs 13.03 crore on BSE.

On NSE, the stock listed at Rs 872, 8.11 per cent lower to the IPO price. Market cap of the firm stood at Rs 5.51 lakh crore. Total 44.20 lakh shares of the firm changed hands amounting to a turnover of Rs 385.4 crore on NSE.

The grey market premium (GMP) of LIC IPO stood at minus Rs 12, signalling listing at a discount to the issue price today. GMP of LIC has fallen from Rs 85 on May 3. The IPO opened on May 4 and closed on May 9.

The IPO was subscribed 2.95 times on the final day (May 9). The share sale received bids for over 47.83 crore (47,83,67,010) shares against the total issue size of over 16.20 crore (16,20,78,067) shares. While the portion meant for policyholders was subscribed 6.1 times, the employees' portion was booked 4.4 times.

A day ahead of the share sale on May 2 (since market was closed on May 3), the insurer garnered Rs 5,620 crore from anchor investors, signaling strong interest. Norwegian wealth fund Norges Bank Investment Management and the Government of Singapore were among the subscribers to the anchor book.

Besides other global funds, domestic mutual fund houses such as HDFC Mutual Fund, SBI, ICICI and Kotak also participated in the anchor issue of LIC. Over 20 investors had expressed interest in subscribing to the anchor book, according to reports.

Anchor investors are institutional investors who subscribe to an IPO before the issue opens to the public. Usually, anchor investors invest in an issue a day before the opening of the IPO. They are required to bid for the shares within the price band for the IPO. Each anchor investor is required to invest a minimum of Rs 10 crore during the issue.

Meanwhile, the government has raised Rs 20,557 crore from the IPO. It sold 3.5 per cent stake or 22,13,74,920 shares in the insurer through the IPO. Stake of the government, which stood at 100 per cent before the issue has been trimmed to 96.50 per cent after the IPO.