Life Insurance Corp. of India placed a major bid for shares of General Insurance Corp. of India in the latter's IPO, Mint reported Oct. 12, citing "two people aware of the development."
This means the institutional and overall portions of the float are respectively oversubscribed and substantially subscribed on the first day of issuance, said one of the sources. The other source said LIC placed a bid for shares worth between 70 billion and 80 billion rupees. The issuance period runs from Oct. 11 to Oct. 13.
LIC Chairman V.K. Sharma said LIC had invested in General Insurance's IPO but did not disclose the bid amount. Both companies are owned by the Indian government.
General Insurance, India's largest reinsurer, is looking to raise about 113.70 billion rupees in the listing, with shares priced at between 855 rupees and 912 rupees each.
The company received bids for 99,304,384 shares against a total issue size of 124.7 million shares, Mint reported Oct. 11. If the listing is fully subscribed at the upper end of the price range, it will be the second-largest IPO of an Indian company behind the October 2010 float of Coal India, which raised about 150 billion rupees.
The Indian government is selling 107.5 million shares in General Insurance, which will itself sell 17.2 million new shares. It intends to use listing proceeds to support business growth and maintain solvency levels, among other things.
As of Oct. 11, US$1 was equivalent to 65.16 Indian rupees.