Check out the mutual funds that invested in LIC’s anchor book and those who skipped
Life Insurance Corporation (LIC) mobilized Rs 5,627 crore from anchor investors ahead of its initial public offering that begins on Wednesday and will be India’s biggest maiden share sale.
The LIC IPO, which closes on May 9, involves the government selling shares worth Rs 21,000 crore. The government had initially intended to sell a 5% stake in the company, but lowered it to 3.5%. The insurer itself isn’t raising any money.
LIC closed its anchor book closed on Monday by issuing 59.2 million shares at the upper end of its price band of RS 902-949 apiece. Indian mutual funds accounted for nearly three-fourths of the anchor portion. A couple of sovereign wealth funds, a Dubai-based financial services provider, the holding company for HCL Group and a few insurance companies also invested in the LIC IPO.
So, which mutual fund houses were bullish on the LIC IPO and which ones gave it a pass?
India has 44 mutual fund companies, which manage more than 2,500 schemes across equity, debt and hybrid categories. As many as 15 mutual fund companies bought 42.1 million shares via 99 schemes to invest a total of Rs 4,001 crore into the anchor book of LIC.
LIC’s market valuation after the IPO will be around Rs 6 lakh crore. This will make it a large-cap stock and put it just behind Reliance Industries, TCS, HDFC Bank and Infosys. No wonder, then, that several large-cap funds participated in the anchor book. Large- and mid-cap funds, flexicap funds and a few small-cap funds also took part in the anchor book.
Most of India’s biggest MF houses participated in the anchor book while many of the smaller ones skipped the issue. SBI MF, ICICI MF, HDFC MF—three of the largest fund houses— were the most bullish.
SBI Equity Hybrid was the single-biggest buyer, investing Rs 519 crore to corner 9.2% of the anchor book. SBI Balanced Advantage Fund invested Rs 205 crore, SBI Bluechip pumped in Rs 190 crore and SBI Flexicap put in Rs 93 crore.
ICICI Value Discovery accounted for 3.9% of the total book with an investment of Rs 220 crore. ICICI Bluechip and ICICI Balanced Advantage Fund invested Rs 120 crore each.
HDFC Balanced Advantage Fund invested Rs 200 crore while HDFC Hybrid Equity pumped in Rs 120 crore. HDFC Flexicap and HDFC Top 10 invested Rs 100 crore each.
Aditya Birla Sun Life, Axis MF, Nippon Life MF, Kotak MF, L&T MF and Franklin MF were the other asset management companies that invested in LIC.
On the other hand, more than two dozen MF houses either didn’t get allotment or decided to skip the issue.
These include DSP Mutual Fund, Mirae Asset Management, Edelweiss Mutual Fund, Canara Robeco Mutual Fund, Motilal Oswal Mutual Fund, PPFAS Mutual Fund and LIC Mutual Fund.
Other MF houses that were not part of the anchor book include PGIM India, HSBC, Mahindra Manulife, Union MF, Quant, NJ Mutual Fund, IIFL MF, IDBI Mutual Fund, BOI AXA MF, JM Financial, Navi MF and WhiteOak Capital MF.
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