Day 5: LIC IPO subscribed 1.77 times by policyholders, 4.96 times by retail and 3.75 times by employees

On May 7, the GMP (Grey Market Premium) for the LIC IPO was Rs.50. Following the recent sell-off in the secondary markets, the GMP has dipped somewhat. However, the GMP has begun to improve, and on May 6, it was at Rs.45. With increased demand for IPO shares, the premium might rise even more in the days leading up to the IPO.

The LIC IPO, which raised $2.2 billion, is one of the top ten most significant insurance IPOs ever. India has been a leader in the insurance IPO industry, with other large insurance and insure-tech IPOs such as Policybazaar and Star Health.

Subscription status for the LIC IPO

By 12 noon on Sunday, May 8, investors had bid for 27,65,90,685 equity shares, or 1.1 times the 16,20,78,067 equity shares offered for subscription, according to BSE statistics.

Only the quota for qualified institutional buyers (QIBs) awaited complete subscription among the five categories, with investors bidding for only 67 percent of the allocation.

Retailers, employees, policyholders, and HNI investors all had their quotas filled. Policyholders’ allotment was subscribed 4.8 times, followed by employee’s allocation at 3.6 times.

Other Details

The issuance is fully an offer for sale of around 22.13 crore equity shares by the Indian government, which has a 100% ownership in the insurance but will only sell 3.5 percent of it.

LIC intends to increase up-selling and cross-selling, increase direct sales of individual items on their website, develop products for millennials, focus more on non-par products, protection-based products, and connected products, and increase up-selling and cross-selling.

Investors should be aware that insurance is a long-term industry, thus we only advocate this investment for the long term.