This is how the govt ensured the LIC IPO went off smoothly

The Indian stock markets saw the listing of the country’s biggest initial public offer (IPO) on Tuesday and while the debut of Life Insurance Corporation of India (LIC) was tepid by all means, there was a lot of unprecedented action that went behind making the public issue a success in terms of subscription. 

Speaking on the occasion of the listing of the insurance behemoth, Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM), highlighted a slew of things that the government along with other stakeholders – regulators, bankers, brokers and investors – did to ensure that the issue with a size of nearly Rs 21,000 crore went off smoothly. 

“As a legacy institution, it was a huge task,” said the 1987-batch IAS officer of the Odisha cadre, while adding that the government constituted a working group with representatives from institutions like the Securities and Exchange Board of India (SEBI), National Payments Corporation of India (NPCI) and the Indian Banks’ Association (IBA), among others. 

“There was a special drive by the banks and LIC in Tier 2/3 towns and since November 2021 around 50 lakh new demat accounts were created,” said Pandey. He further added that the issue saw participation from “some unheard rural areas and many villages” as well with the total number of applicants at a record 73 lakh excluding the anchor portion. 

According to the bureaucrat, the issue witnessed bids coming from all parts of the country with one per cent of the bids coming from the north eastern states as well. 

Incidentally, the IPO bidding window was kept open for six days – typically IPOs are kept open for three working days – that saw banks processing the bids even on a weekend. 

The government had also set up 24X7 helplines and war rooms with the Registrar & Transfer Agent (RTA) ensuring there were no glitches related to bids processing and allotment. 

“There were millions of investors who checked with the chatbots and the response time was less than 10 milliseconds. Within an hour of allotment, 60 lakh emails were gone to the investors,” said Pandey adding that the government has actually set a global standard with the LIC IPO. 

He highlighted the fact that while there was four days to finalise the allotment, the whole process was successfully completed in just two hours as various stakeholders – three sponsor banks, 10 merchant bankers, two depositories and 50 other banks – worked as “Team India”. 

In terms of the issue size and pricing, the DIPAM secretary said that it was the “right size” considering the market conditions and overall environment constraints.

 

Read More: Buy, sell or hold: What should LIC investors do post tepid listing?

Read More: LIC Debuts on Dalal Street: Macquarie sets target price at Rs 1,000