LIC increases stake in Indian Oil, buys nearly 90% shares on offer

State-owned Life Insurance Corp of India (LIC) has purchased nearly 90% of Indian Oil shares sold by the government in its Rs 9,379-crore disinvestment.

business Updated: Aug 25, 2015 20:04 IST
LIC,Indian Oil,Stake
File photo of the Life Insurance Corporation of India (LIC)'s logo. (Picture credit: Wikipedia)

State-owned Life Insurance Corporation of India (LIC) has purchased nearly 90% of Indian Oil shares sold by the government in its Rs 9,379-crore disinvestment.

LIC's stake in the state-run oil marketing firm has gone up from 2.52% to 11.11% following its participation in India Oil Corporation's (IOC) offer for sale on Monday.

The insurer bought as many as 20.87 crore shares or 8.59% of IOC, according to a filing by LIC.

The government had announced on Monday that its biggest disinvestment of the fiscal was subscribed 1.18 times.

IOC listed "OFS and Open Market" as the mode of LIC's acquisition done on August 24.

The government had offered 24.28 crore shares for sale through the OFS, whose floor or minimum bid price was set at Rs 387 apiece.

While overall, the issue was subscribed by 1.18 times the retail investors picked up less than one-fifth of their quota on a day when global meltdown wiped away a massive 1,624 points or nearly 6% from the benchmark BSE Sensex.

IOC shares dipped to Rs 378 on Monday as against the auction floor price of Rs 387.

Disinvestment Secretary Aradhana Johri had termed the sale as highly successful given the market conditions and said with this the government has managed the best-ever first half disinvestment collections in seven years.

Together with three other disinvestments since April, the government has mopped up over Rs 12,600 crore, or a little less than one-fifth of the yearly target of Rs 69,500 crore.

The stake sale had managed to get total bids for Rs 11,107 crore for 28.74 crore shares, against an offer of 24.28 crore shares.

Retail investors, who are offered shares at 5% discount, (Rs 367.65) picked up only 18% of their quota of 4.85 crore shares.

Institutional investors put in bids for 27.85 crore shares or 1.43 times the 19.42 crore shares reserved for them.

Asked if LIC was asked to bail out the stake sale, Johri had stated on Monday that "calls are made to all investors. Right along the line calls are made to every investor by us, by our merchant bankers in a situation of crisis like this to every actor. We even spoke to stock exchanges".

First Published: Aug 25, 2015 19:46 IST