How was the anchor response to the LIC IPO, which opens on 04th May 2022?
Answer
Answer
The anchor issue of LIC saw a strong response on 02nd May 2022 and the announcement was made early on 03-May 2022. As you must be aware, the IPO opens on 04th May 2022 in the price band of Rs.902 to Rs.949 and will close for subscription on 09th May. Remember that the anchor placement ahead of an IPO is different from a pre-IPO placement. Anchor has a lower lock-in and anchor allotment cannot be done below the IPO discovered price.
On 02nd May 2022, there was solid response to the anchor placement of LIC. A total of 5,92,96,853 (592.97 lakh shares approximately) shares were allotted to a total of 123 anchor investors. These anchor investors comprised of 99 mutual fund plans and 24 foreign portfolio investors and others. The anchor allocation was done at the upper price band of Rs.949 which resulted in overall anchor allocation of Rs.5,627.27 crore.
Listed below are the top 10 top anchor investors who were allotted more than 2% of the anchor quota each. The major anchors included the following.
Anchor Investor
No. of Shares
% of Anchor Portion
SBI Equity Hybrid Fund
5,468,910
9.22%
BNP Investments LLC
4,741,830
8.00%
Government Pension Fund (Norway)
2,370,915
4.00%
ICICI Pru Value Discovery Fund
2,318,220
3.91%
SBI Balanced Advantage Fund
2,160,165
3.64%
HFDC Balanced Advantage Fund
2,107,485
3.55%
SBI Blue Chip Fund
2,002,110
3.38%
Government of Singapore
1,598,220
2.70%
ICICI Pru Blue Chip Fund
1,264,500
2.13%
ICICI Pru Balanced Advantage Fund
1,264,500
2.13%
Data Source: BSE Filings
The anchor response has been 26.79% of the total issue size, which is roughly what the government had budgeted for. The QIB portion in the IPO will be reduced to the extent of the anchor shares placed and the balance amount will be available for QIB allocation in the IPO. Perhaps, the strong response for LIC was due to the unique positioning that LIC has in the Indian psyche.
Other major anchor investors in the LIC IPO included FPIs like Monetary Authority of Singapore, Ghisallo Master Fund, Societe Generale, AG Dynamic, Segantii India and Saint Capital Fund. Some of the other key domestic institutions acting as anchors in the IPO were Axis MF, Nippon India Fund, NPS Trust, Kotak Life, Tata Investments, Kotak MF, UTI MF, PNB MetLife, Sundaram MF, Invesco MF, Tata MF, Bajaj Allianz, Baroda BNP MF and IDFC MF. The mutual fund allocation represents 71.12% of the overall anchor allocation.