Domestic investors were mainly responsible for the success of the LIC IPO, said Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM) on Monday after the IPO closed with 2.95 times subscriptions.
He said the success of the IPO shows that India’s capital market and investors have the potential to pull off large IPOs like LIC, while most FIIs largely stayed away from mega listings.
“FIIs take their own call like all other investors. I think we should look at it from a positive angle that this issue is an example of self-reliant India – that India has pulled up a bigger issue. The interest of retail investors shows that we, our capital market and the capacity of the investors have increased to such an extent that we do not need to be completely dependent on FIIs to run the market. They are equally welcome and some have come, but it is true that mainly the issue has been raised domestically.”
He said that LIC IPO has received “tremendous success from all categories of investors, retail, policyholders as well as QIPs and NIIs”.
After being open for a long period of six days, LIC IPO saw the total subscription at 2.95x on the closing day of 9th May. Retail investors’ share was subscribed for 1.99 times, employees’ share at 4.39 times and policyholders 6.11 times for their share of shares, according to exchange data. Foreign institutional investors participated in the IPO amid geopolitical uncertainties and stock market volatility.
Department of Financial Services Sanjay Malhotra said the inflow of money from investors in LIC amid FII outflows speaks volumes of LIC as a company.
“So another way of looking at it is that on one hand there has been a net FII outflow and on the other, we have an inflow. So even though there is an outflow, there is an inflow and there is an investment for LIC which talks of LIC as a company,’ he said.
Pandey further said that the long exercise for listing of LIC will not only deepen the capital market but will also facilitate large number of investors in the publicly owned company in the form of shares of LIC.
DIPAM Joint Secretary Alok Pandey said that while the size of the issue was 21,000 crores, the actual income may be approx. 20,500 crore taking into account the exemptions given to retail investors.
When asked whether LIC will be included in the Indian market indices from day one as it was the biggest IPO in the stock markets or some foreign indices as well, Pandey said that though the stock will eventually be included in the indices. It will have to follow all the procedures before inducting it and meet the minimum requirements in terms of float and size.
The government plans to allot shares on May 12 and list the company on May 17, Pandey said, adding that the government has provided investors with the best possible convenience, “Let us hope all goes well on the day of listing.” ,” They said.
Pandey said the size of the IPO was decided keeping in mind the overall situation and with geopolitical uncertainties the investment pool gets reduced.