The state-run insurer’s market dominance and the possibility of its inclusion in global indices like the MSCI after listing have made it attractive to investors.
Despite the large issue size and volatile market conditions, marquee institutional investors have given a thumbs up to the Life Insurance Corporation’s (LIC’s) initial public offering (IPO) during roadshows. The state-run insurer’s market dominance and the possibility of its inclusion in global indices like the MSCI after listing have made it attractive to investors. Despite the volatility in equity markets, merchant banking sources told FE on Friday that institutions have the appetite for the mega listing. Typically, investment bankers meet 200 institutions during these roadshows, but a lot more institutions are expected to participate as it is comparable to the likes of Alibaba and Saudi Aramco.
Market sources claim that the interest in this IPO has not been impacted despite imminent rate cuts across developed markets. Foreign portfolio investors (FPIs) have continued to sell risky assets for the last few months in anticipation of the unwinding of the post-pandemic stimulus. However, institutions that participated in LIC’s roadshows say that there would be sufficient demand for LIC’s offering. Some of the foreign investors that have participated in the roadshows are Fidelity International, Capital International and GIC Singapore. Domestically, ICICI Prudential Mutual Fund and HDFC Mutual Fund are among the top names in the book, merchant banking sources told FE.
LIC’s officials are burning the midnight oil to ensure success of the public issue by talking to institutional investors all through the day across time zones. The first observance letter from the Securities and Exchange Board of India (Sebi) can be expected on March 5, sources indicated, following which the issue would open to public. Virtual roadshows are being held everyday for investors at home, in Europe and the US. “Typically, for such large issuances, the target is nearly 200 institutional investors in the roadshows ahead of the IPO, however, for LIC, the numbers will go higher than 200,” said the person cited above.
Sovereign funds, pension funds and other institutional investors are some of the investors targeted by lead managers, considering the issue size of the offer. They further added that the value of the insurance giant is likely to be around 2.7 times the embedded value Rs 5.4 lakh crore. As a result, the company could be valued at Rs 14.5 lakh crore. The offer is expected to be launched by mid-March and the issue size could range between Rs 65,000 crore and Rs 75,000 crore, sources said.
https://www.financialexpress.com/market/ipo-news/institutional-investors-seen-lining-up-for-mega-lic-ipo/2438256/
