Domestic mutual funds pitched in to bridge the gap in Life Insurance Corporation (LIC) of India’s anchor book as a marquee foreign institutional investor could not remit the money to India due to “technical reasons”.
The insurance giant collected Rs 5,627 crore from 123 anchor investors ahead of the launch of its IPO, which was open for subscription from May 4-9.
According to The Economic Times, BNP Investments LLC, an overseas fund, was allocated Rs 449.9 crore for 4,741,830 shares by LIC.
However, due to a “technical issue,” the money could not be remitted to India through the custodial account multiple times between April 29 and May 2.
The gap in the total amount, allocated to BNP Investments was bridged by domestic funds, mostly belonging to the SBI family.
SBI Multicap Fund brought in about Rs 353.6 crore, and the NPS Trust, the central government pension fund scheme invested Rs 159.9 crore to bridge the gap, the ET report added, quoting the anchor investor list released by LIC on May 3.
BNP Investments LLC is a Dubai-based investment, consulting, and financial services firm established by Biswanath Patnaik in 2018.
The company is a foreign portfolio investor with a SEBI registration. BNP Investments was initially allocated around 8 per cent of the total shares set aside for anchor investors.
LIC’s anchor book saw the majority of investments by over 90 domestic mutual fund schemes as a few foreign institutional investors skipped the IPO.
The domestic mutual funds acquired around 71 per cent of the total shares allocated to anchor investors for Rs 949 for each share.
Anchor investors are the marquee institutional investors offered shares in an IPO before the issue opens for a subscription.
The anchor investors agree to subscribe to shares at a fixed price, which builds confidence in the soon-to-be listed shares among retail investors.