Mumbai: General Insurance Corporation of India’s (GIC Re) IPO received a lukewarm response from wealthy and retail investors. However, GIC re was rescued after state-owned Life Insurance Corporation of India (LIC) bid for more than half of Rs 15,350 crore bids received.
According to investment bankers who spoke to Business Standard said that the poor response is not an encouraging sign for the government, which has readied two more big-ticket share sales over the next few weeks. The country’s largest reinsurance company, GIC Re, garnered only 1.35 times the subscription. The retail (from non-wealthy individuals) portion of the IPO was subscribed 55 per cent; the high net worth individual (HNI) portion was subscribed 22 per cent. The qualified institutional buyer segment (QIB) was subscribed 2.25 times, stated the newspaper reports.
“If not for LIC, the GIC IPO might not have been able to go through. Foreign investors continue to be in a risk-off mode.” said an investment banker. Foreign investors made applications less than five per cent of the issue size. In total, the company received 6,42,000 applications.
The price band for the offer was Rs 855-912 per share and was supposed to raise Rs 11,300 crore via IPO.