Retail investors contributed most to LIC IPO success, says DIPAM secretary Tuhin Kanta Pandey

Government expects to raise ₹20,500 crore from stake sale

The initial public offer (IPO) of the Life Insurance Corporation (LIC) of India closed successfully on Monday evening at 7 p.m. and is expected to yield about ₹20,500 crore to the exchequer, top finance ministry officials said.

“I am pleased to inform you that the offer that was started on May 4, has closed today at 7 pm, and it has met with a tremendous success with a good response from all categories of investors, including policy holders and retail investors,” Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM) said at a press conference. The government is offloading 3.5% of its stake in the firm, whose shares are to be listed on the stock exchanges on May 17.

“This long exercise that was undertaken will eventually lead to the listing of the LIC, and not only deepen capital markets but also facilitate a large number of investors into publicly owned companies and policy holders have also supported this exercise remarkably,” Mr. Pandey said. “Let us hope that everything goes well on the listing day,” he added.

Asserting that the issue was largely subscribed by domestic investors, the DIPAM Secretary said it can be considered an example of ‘AtmaNirbhar Bharat’ that such a large issue has been organised smoothly with investors across the country showing the capacity to deliver “rather than just depend on foreign institutional investors”. “Predominantly, this has been led by domestic investors,” he said.

Though the issue size was pegged at ₹21,000 crore, the government expects to raise ₹20,500 crore from the IPO because of the discounts offered to retail investors and policy holders. The exact amount will be worked out once applications are vetted and the allotment process is complete, a senior DIPAM official said.

Mr. Pandey shrugged aside concerns raised by Opposition parties on the valuation of the LIC shares, stressing that everyone is free to analyse this, but this was not the right time to comment as the issue has closed.

“We kept the issue size keeping in mind the current market environment and the consideration that it should not crowd out other investments. There is always an issue of the right time, but the IPO has been successfully pulled off,” he emphasized.