LIC IPO Report Card: Record $2.7 Billion Raised, High-End Value Rs 949, Among World’s Top 5 IPOs Of All Time!

India raised 205.6 billion rupees ($2.7 billion) in its biggest ever IPO priced at the top of the range because of the strong demand from local investors and a last-minute rush by foreign funds.

Life Insurance Corporation of India shares were priced at 949 rupees each. LIC shares were offered at 902-949 rupees each. Trading on the stock exchange is going to to begin May 17.

LIC’s IPO is being called Amarco moment

LIC’s IPO is called India’s “Aramco moment” in reference to the Gulf oil titan Saudi Arabian Oil Co.’s $29.4 billion float in the year 2019 which become the world’s largest IPO. LIC’s IPO has ended up being similar to the Aramco IPO not only in its scale but also in its dependence on domestic investors after some foreign buyers thought it too expensive. Foreign institutional investors stepped up their bids in the last hours before the close of the IPO this week, steering clear of currency risks and global market uncertainties.

LIC smashed India’s record as the country’s biggest IPO and also became the world’s fourth-biggest offering this year, as per the data sources. LIC’s debut happened at a time when capital-market activities have dramatically slowed down globally as the war in Ukraine has caused market volatility and made investors wary.

Shares of LIC are trading at a discount of approximately 30 rupees to its IPO price in the ‘gray market’, traders said. The expectation for a powerful debut by LIC’s shares is dwindled as the demand in the unregulated market, where investors place bets on listing day gains, has decreased in the last few days.

Retail investors and LIC policyholders were among the most excited for the offering because of the discounts offered to them. The portion reserved for them was fully bidded upon days before the offering was closed. The anchor portion of the IPO drew in sovereign funds from Norway and Singapore while other foreign investors speeded up only on the very last day.

LIC’s offer was oversubscribed

The LIC offer was oversubscribed by almost three times. The money is going to assist the government overcome a budget deficit that’s expected to increase as product prices increase across the world.

For the banks working on the IPO, the share sale may not give them large fees but offers prestige in the league table rankings, as per the reports. The 10 banks on the IPO received a total 118 million rupees as fees, according to the prospectus, a fragment of what they could have typically gotten for such a large offering.