Norway, Singapore Wealth Funds Invest in India’s Largest IPO

(Bloomberg) -- India's largest ever public offering drew anchor investors including Norway's sovereign wealth fund and the Singaporean government, raising 56.3 billion rupees ($736 million) ahead of its full initial public offering.

The 123 anchor investors joining Life Insurance Corp. of India's IPO committed to purchase shares at 949 rupees each, the top end of a marketed range, according to a stock exchange statement Tuesday. They include the Norwegian fund and the Singapore government, confirming an earlier report by Bloomberg News, as well as 15 domestic mutual funds accounting for 71% of the anchor allocation. Orders from retail investors for the listing, which could raise as much as 210 billion rupees in total, will be taken starting Wednesday.

LIC's IPO, which had previously been touted as India's Aramco moment in reference to the $29.4 billion listing of Gulf oil giant Saudi Arabian Oil Co., is testing the depth of India's capital market. While India's government has pared back its original fundraising goal by about 60% -- as the war in Ukraine eroded investor appetite -- the offering will still be the nation's biggest.

Founded in the late 1950s, LIC is the country's oldest insurer, and had the market to itself until the government opened it up to private competition in 2000. It remains India's largest insurer with a sales agent in almost every neighborhood across the country of about 1.4 billion people. The listing is expected to lure small-town retail investors and loyal policyholders with an emotional attachment to the firm.

LIC has a 60% market share of India's 24-company-strong life insurance market, but its hold is shrinking as private players like HDFC Life Insurance Co. and SBI Life Insurance Co. chip away at its dominance. The private sector has been on an aggressive expansion spree during the Covid-19 pandemic, growing new individual policy premiums while LIC struggles.