Mumbai: Life Insurance Corp. of India’s initial public offering will take subscriptions even on Saturday, an unusual move aimed at attracting investors including retail buyers for the nation’s biggest share sale.
The IPO, which kicked off on Wednesday, will remain open until May 9, including on Saturday, a notification on the National Stock Exchange of India Ltd. said. The Indian government is selling 221.4 million LIC shares at between 902 rupees and 949 rupees each, which would raise as much as 210 billion rupees ($2.7 billion) at the top end of the range.
“This is a bit unusual for a share sale. However, this exception has been given to LIC IPO considering its sheer size and humongous interest from retail investors,” said Kranthi Bathini, chief market strategist at WealthMills Securities in Mumbai. “This can put some additional pressure on the system. However the Indian capital market infrastructure is geared to facilitate bidding on Saturday too.”
Retail investors will be alloted 35% of the total shares in the offer, and given a discount of 45 rupees from the IPO price. About 10% of the float, meanwhile, has been earmarked for LIC’s policyholders, who will receive a 60-rupee discount on each share. The minimum bid lot size is 15 shares, which means a retail investor would have to shell out at least 13,560 rupees ($177) for a stake. Policy holders have to spend at least 13,335 rupees.
Founded in the late 1950s, LIC is the country’s oldest insurer, and had the market to itself until the government opened it up to private competition in 2000. It remains India’s largest insurer with a sales agent in almost every neighborhood across the country of about 1.4 billion people. —Bloomberg