Update: Record $2.7 Billion IPO by India’s Life Insurance Corp. Is Oversubscribed

The record $2.7 billion initial public offering (IPO) by India’s Life Insurance Corp. (LIC) was oversubscribed on Thursday, helped by attractive pricing, making way for gains over the listing price later this month.

Investors bid for 166.9 million shares by the end of bidding on the second day of subscription for India’s largest public issue, compared with 162.1 million shares on offer, exchange data showed.

Demand for LIC’s IPO continued while the wider stock market .NSEI ended flat a day after the Reserve Bank of India unexpectedly raised interest rates ahead of a 50 basis points hike by the U.S. Federal Reserve.

The Indian government expects to raise up to $2.7 billion, just a third of its original target, from selling a 3.5% stake in the country’s top insurance company, giving it an initial value of around $78.52 billion, which could make it among the country’s top five companies.

LIC set the initial price band at 902 rupees to 949 rupees a share.

The LIC subscription, set to close on May 9, is offering a discount to employees and retail investors of 45 rupees per share. LIC policyholders will be offered a discount of 60 rupees per share.

“The pricing and the discounts make this offering attractive despite there being a chance of near-term market volatility,” said Narendra Solanki, head of fundamental research at Anand Rathi.

Moody’s Investors Service said LIC’s IPO was credit-positive for India’s life insurance industry as the listing will drive transparency and competitiveness in a sector dominated by the state-run insurer, which has more than 280 million policies.

However, the rating agency also said the benefits from the IPO will be limited until the government sells a substantial stake in the company, that has nearly 65% market share.

(Reporting by Chris Thomas, Aftab Ahmed and Nupur Anand; editing by David Goodman and Emelia Sithole-Matarise)