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As the much-awaited initial public offering (IPO) of Life Insurance Corporation of India (LIC) closed for subscription on Monday, demand for its shares in the grey market tanked.

In stock market parlance, the buying and selling of securities before they are officially issued on the stock market is called grey market.

In the unofficial market, shares of the insurance major exchanged hands at a minuscule premium of Rs 8-10 per share over the issue price, which is 90 per cent below the premium of Rs 100-105 per share it commanded a week earlier, according to an Economic Times report.

The initial public offering of Life Insurance Corporation of India has received robust response from investors as the insurance major's offer has been subscribed nearly 2.9 times.

It received bids for 46.77 crore equity shares against IPO size of 16.2 crore equity shares.

The portion set aside for policyholders has been subscribed 5.97 times, employees bid 4.31 times the allotted quota, and retail investors 1.94 times, while the reserved portion of qualified institutional buyers has booked 2.83 times and that of non-institutional investors 2.8 times, as per reports.

Though the government has brought down the issue size from 5 per cent to 3.5 per cent, it was seen as a landmark public issue in the history of the Indian capital market, being India's biggest IPO till date.

The IPO values LIC at Rs 6 lakh crore.

The issue offer of the LIC was in the price band of Rs 902 to Rs 949.

Also, the policyholders were offered a Rs 60 discount, while for retail investors, the discount was at Rs 45.

Department of Investment and Public Asset Management (DIPAM) Secretary, Tuhin Kanta Pandey, in a press conference on Monday, said, bidders will be allocated shares on Thursday and will be listed on stock exchanges on May 17.