LIC shares to list tomorrow, here's what to expect

The shares of insurance major LIC will make their debut on bourses tomorrow (May 17). Post listing, the state-owned insurer will become the fifth-largest company in the country with a valuation above Rs 6 lakh crore.

Only Reliance Industries, TCS, HDFC Bank and Infosys will have more capitalisation than LIC.

The share is likely to list on a muted note with a possibility of a discount debut too since the grey market premium (GMP) of LIC is trading at a discount of Rs 25.

However, experts have attributed the fall in GMP to the volatile conditions in the market. GMP of LIC which stood at Rs 85 on May 3 fell to minus Rs 10 on May 13, signaling a 111.76 per cent crash in 10 trading sessions.

The IPO opened on May 4 and closed on May 9.

The insurer managed to collect  Rs 5,620 crore from anchor investors, signaling strong interest a day ahead of the share sale. 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.

On the other hand, foreign investors have not been enthused by the share sale and shunned the issue due to volatile market conditions.

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 employee's portion was booked 4.4 times.

Meanwhile, the government has raised Rs 20,557 crore from the IPO. The IPO has been priced at the top-end of indicated range at Rs 949. The price band of the IPO was Rs 902- Rs 949.

The government 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.

Also read: LIC IPO: Grey market premium crashes 111% ahead of listing next week

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