A Life Insurance Corporation office in India. Photo: Supplied

India’s state-owned Life Insurance Corporation’s initial share sale has drawn a good response from investors and was fully subscribed on the second day of bidding on Thursday.

India’s largest initial public offering will be open for subscription till May 9 and investors can also bid during the weekend. In contrast, previous record-holder Paytm had struggled to get investors as the digital payment startup was seen as a high-risk bet by market analysts and managed to get oversubscribed 1.89 times.

Life Insurance Corporation has already been subscribed 1.03 times and there are three more days to go.

The insurance major’s share sale has so far generated bids worth 207.44 billion rupees (US$2.7 billion), including the 56.28 billion rupees raised from anchor investors. Small investors have poured in more than 120 billion, and nearly 3.6 million individual investors have participated so far.

It is expected that nearly 10 million may participate.

Employees and policyholders are being given a discount of 60 rupees and 45 rupees per share respectively. At the end of the second day, the demand for policyholders’ quota was subscribed 3.11 times, while the employees’ portion was subscribed 2.22 times.

The qualified institutional buyer’s segment was subscribed 0.40 times, while non-institutional investors and the retail segments were subscribed 0.47 times and 0.93 times respectively.

The government had initially planned to sell shares worth 650 billion rupees from its 100% stake. However, it had to scale it down to 210 billion rupees because of market uncertainty caused by the Russia-Ukraine war and sustained selling by foreign investors.

In February, the government filed a draft red herring prospectus stating it wanted to sell a 5% stake in the insurance giant. However, a fortnight ago the government decided to lower the issue size to 3.5%.

This share sale is expected to provide momentum to the Narendra Modi government’s disinvestment agenda. The government has pegged disinvestment receipts at 650 billion rupees for the current financial year, up from 135.31 billion rupees raised in the last fiscal year.

However, opposition politicians have accused the government of selling the insurance major’s assets at a throwaway price. Congress party spokesperson Randeep Singh Surjewala said the government appears desperate to go ahead with Life Insurance Corporation share sale despite lower valuations, global uncertainties and a volatile market.