Life Insurance Corp (LIC), the government-owned largest life insurer in India, on Friday bailed out the mega initial public offering (IPO) of GIC Re. At close, the Rs 11,500-crore IPO for GIC Re, which is the third-largest such offering ever in India, was subscribed close to 1.4 times as retail and HNI portions remained under-subscribed, while the institutional part was subscribed 2.2 times, data on the exchanges showed.

GIC Re is the largest reinsurance company in the country owned by the government. The IPO pricing values the company at Rs 80,000 crore. This makes it the second most valuable PSU in the financial sector after State Bank of India. According to market players, LIC alone had put in a bid that was worth between Rs 4,500-6,000 crore.

The insurer does not disclose its buying and selling figures in individual stocks. Retail bids amounted to less than Rs 4,000 crore and accounted for roughly half the allocated number of shares. This was despite a discount of Rs 45 per share for retail investors. Through the IPO, which was sold at a price band of Rs 855-912 per share, 1.72 crore new shares were issued while the government sold 10.75 crore shares.

The company would use the proceeds to augment its capital base to support future growth, to maintain current solvency levels and also for general corporate purposes.

Axis Capital, Citigroup, Deutsche India, HSBC Securities and Kotak Capital are managing the offer. While brokers have recommended the IPO, some analysts have been cautious on the prospects for crop insurance which were a major driver of profits in FY17. In the insurance sector, three companies have already gone public — ICICI Prudential Life, ICICI Lombard and SBI Life Insurance.