We mentioned in the Coal India OFS analysis that we didn’t see the demand for the offer as very much and the issue might need to be rescued.
This government, like earlier ones, might be calling certain companies to come in before 3:30, such as those named Life Insurance Corporation of India. New emperor, same clothes? This day will tell.
And it turns out that fated call did happen. From Economic Times:
Life Insurance Corporation and other domestic institutions bailed out the government’s biggest disinvestment offering by picking up a substantial chunk of Coal India’s shares in the offer for sale (OFS) that concluded on Friday. The insurer is believed to have invested more than Rs 10,000 crore, helping the new government’s first major disinvestment offering sail past the finish line.
They managed to sell 22,000 cr. worth shares. 10,000 cr. out of 22,000 cr. to LIC alone? That’s a lot. And it was a major chunk of what Insurers bought:
The last time LIC rescued an offer, it was the ONGC issue in 2012, which was at Rs. 290. With ONGC currently at 350, the return of 21% is sub-par considering the Nifty has gone up more than 40% since then.
The concept of the government forcing the LIC to invest is a threat to the concept of disinvestment. If you’re going to sell from your one arm to the other, just because you are allowed to do “magic” accounting, it really isn’t a sale. But such is life, and it’s fairly obvious that this government has done exactly what the Congress did earlier. Both ways, it’s distasteful and deceitful.
Note to people supporting the new government even if they slapped you in the face: Please advertise this blog as Anti-whatever.
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