India’s $2.7 billion initial public offering of insurance giant LIC was oversubscribed by Thursday, exchange data showed, as small investors bid enthusiastically for the country’s biggest IPO to date.

Prime Minister Narendra Modi’s government is desperate for proceeds from the sale of 3.5 per cent of its stake in Life Insurance Corporation of India and other state assets to help fix tattered public finances.

The long-awaited IPO  — delayed since March due to market volatility — opened on Wednesday and will close for bids on May 9. But the issue was already 103 per cent subscribed by the end of its second day, with the categories for employees and policyholders receiving double and triple the bids compared to the shares reserved.

The government is selling 221 million shares within a price band of 902 to 949 rupees ($11.81 to $12.42).

The insurer is offering a 60 rupee discount to policyholders, for whom 10 per cent of shares are reserved, and a 45 rupee discount to employees and other small investors.

The category for small “retail” investors -- for whom 35 per cent of shares are reserved -- was 93 per cent subscribed by the end of Thursday.

The government hopes LIC’s IPO will attract legions of first-time investors to the stock market, in a country where less than five per cent of its 1.4 billion population has trading accounts.

Over 6.48 million policyholders completed the formalities necessary to avail of the discount ahead of the IPO, a government official said.

The portions reserved for large investors such as foreign and domestic institutions and high networth individuals were less than 50 per cent subscribed by the end of Thursday.

The IPO is a crucial step in Modi’s policy to “monetise and modernise” state-run companies and plug an estimated 16.6 trillion rupee fiscal deficit this financial year.