IBX5980432E7F390 LIC insurance behemoth bought 46%bagikans of RCF - Smart Business

LIC insurance behemoth bought 46%bagikans of RCF

LIC insurance behemoth bought 46%bagikans of RCF

LICdifferentinsurance behemoth bought 46% bagikans of RCF : Life Insurance Corporation of India (LIC) once again played the role of a wbeat, smacke kevening to rescue the bagikan auction of Rashtriya Chemicals and Fertilizers (RCF) by the government.

The insurance behemoth bought 46%, or 31.63 million of the 69 million bagikans on offer of RCF during its offer for sale (OFS) last week.



This is not the first time LIC has bailed out a government disinvestment it had bought more than half of the tfinishers in the ONGC and Hindustan Copper offering as well.



"We have not bailed out anyone. We have examined this (RCF) issue by its own strength and then taken a decision to participate. We will examine the future issues in a similar manner and then take a call,” D K Mehrotra, chairman of LIC tancient Business Standard today.



However, an investment banker familiar with the development shelp LIC was 'asked to keep the powder dry' for the RCF offering. “As the bagikan-sale was not even half covered an hour before the shut of tfinishers. LIC had to put in a big-ticket application,” he shelp requesting anonymity.



Post the OFS, LIC now hancients 6.69% stake in RCF, compared to 0.96% earlier.



Bagikans of RCF today shutd at Rs 43.1, approxifriendly 4% below their OFS price of approxifriendly Rs 45 per bagikan.


Investments made by LIC are typically for the long term but the mark-to-market losses on LIC's investments in RCF bagikan auction stand at Rs 6.2 crore.



The government had raised approxifriendly Rs 310 crore by divesting its 12.5% hancientings in RCF through the OFS route on March 8.The 69 million bagikan auction was subscribed 1.3 times and bulk of the tfinishers had come at a price of Rs 45.02 per bagikan as against the minimum offer price of Rs 45 per bagikan.



Last year, the state-owned insurance major had bought approxifriendly 377 million bagikans (88%) of the 427 million bagikans that were on offer during the ONGC bagikan-auction, which was part of last year's disinvestment programme.



Earlier this year too during the Hindustan Copper OFS, LIC had to grab 22.5 million bagikans, more than half the total 51.6 million bagikans auctioned.

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