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India’s LIC Mega IPO Sees Huge Demand From Anchor Investors

Sources say the $732 million of Life Insurance Corporation shares held back for key investors have been oversubscribed


LIC IPO
A man cleans a hoarding of Life Insurance Corporation of India before the start of a news conference about the LIC IPO launch, in Kolkata, India, on April 29, 2022. Photo: Reuters

 

India’s biggest IPO, for insurance giant the Life Insurance Corporation (LIC), has already seen demand for shares reserved for its anchor investors oversubscribed.

Sources say the $732 million of shares held back for anchor investors have been oversubscribed at the upper end of the price range.

The Indian government has said it expects to raise up to $2.74 billion, just a third of its original target, from selling a 3.5% stake in LIC in the country’s biggest initial public offering (IPO) so far.

 

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Anchor investors are high-profile institutional investors that are allotted shares before the subscription opens for retail and other investors, and have to commit to holding their shares for a certain period after listing.

LIC’s offering is set to open for other investors on May 4 and will close on May 9. The indicative price range has been set at 902 to 949 rupees per share, with 56 billion rupees ($732 million) of shares set aside for anchor investors. 

Norwegian wealth fund Norges Bank Investment Management and Singapore sovereign wealth fund GIC have subscribed to the anchor book, the source said.

Alongside other global funds, domestic mutual fund houses such as HDFC mutual fund, SBI, ICICI and Kotak have also come in as anchor investors, the source added.

The Abu Dhabi Investment Authority and Qatar investment authority had previously been in talks to be anchor investors, but it wasn’t immediately clear if they had made bids. 

Over 20 investors had expressed interest in subscribing to the anchor book, two other banking sources said.

Foreign institutional investors had some concerns about LIC’s IPO, but global pension funds had shown “good interest,” LIC’s chairman said last week.

 

  • Reuters with additional editing by Sean O’Meara

 

Read more:

India Seen Chopping LIC’s IPO Target to $3.9bn

India Agrees To 20% Foreign Stake In Insurer LIC’s Mega IPO

 

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Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

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