Foreign institutional investors (FIIs) have some concerns about Life Insurance Corp's (LIC) IPO but global pension funds have "good interest" in the Indian state-run insurance giant's issue, the company's chairman said on Wednesday.
M R Kumar's comments came a day after LIC filed its initial public offering (IPO) papers that showed India expects to raise up to $2.74 billion, just a third of its original target, from selling a 3.5% stake in LIC's IPO.
"FIIs have concern, (there is) no doubt that they have concerns but long-only funds (pension funds) they don't mind because they know that they are putting money in for the long haul," Kumar said in an interview.
He did not detail the concerns FIIs might have raised during the presentations to over 180 investors, after which the government tempered its expectations for the issue and cut LIC's valuation to 6 trillion rupees from 17 trillion rupees it had initially estimated.
Sources have told Reuters investors were concerned about LIC's growth prospects as it already dominates nearly a third of the Indian insurance market and has been losing market share to private players like HDFC Life HDFS.NS and ICICI Prudential Life ICIR.NS.
LIC, the country's biggest domestic institutional investor, also has rescued some state-run firm's minority stake sales by the government when they have been undersubscibed.
Kumar expects them to now invest in LIC.
"They are all ready to pitch in and nobody can go and ask them that why are you saving LIC... because they are not saving, they are investing."
Earlier in the day, Tuhin Kanta Pandey, secretary at the department of investment and public asset management, said the LIC IPO was being brought to market in May due to strong demand and a "solid" anchor investor base.
LIC IPO is set to open on May 2 for anchor investors.
For subscription, the issue will open on May 4 and close on May 9.
Pandey had also said the size of the LIC IPO is "optimal" in current market conditions, defending its move to cut the stake sale plan from 5%.
Copyright©2022 Living Media India Limited. For reprint rights: Syndications Today