LIC, which had applied for shares worth Rs 3,000 crore in the Rs 4,000-crore Rural Electrification Corporation follow-on public offer (REC FPO), will not be getting any allotment of shares as its bid price is much lower, said an REC official

The French auction route for public offerings essentially operates on the principle of highest bidder wins. In this route, there is no upper limit to the bid price and the highest bidder will secure the largest share of allotment. The official said that LIC had to revise its bid before 5 p.m. on Wednesday which it did not do. “Even on a pro-rata basis LIC will not be allotted any shares,” said the official.

“LIC was probably brought in to bid to set the tone for the auction,” said an equity analyst. He added that a number of other institutions who have bid for the shares will not be allotted any.