This IPO will be of Life Insurance Corporation. The government plans to sell a 5 percent stake in LIC through this IPO. According to the Draft Red Herring Prospectus (DRHP), the quota for retail investors in the IPO will be 35%. 5 percent will be reserved for LIC’s staff and 10 percent for its policyholders.
LIC is established in 1956. LIC was formed in 1956 by merging 245 insurance companies and the Provident Society. LIC Act, 1956 was established by the Government of India by investing capital of 5 crores. LIC is the only government life insurance company, and the government has a 100% stake in it.
WHAT IS LIC IPO?
LIC is the largest insurance company in India. It is counted among the world’s largest insurance provider companies. At present, LIC has more than 13.5 lakh agents. A large number of people in India choose LIC’s schemes for investment. LIC is going to list its IPO soon. A large number of investors in the country have been waiting for a long time for the IPO of SIC. LIC IPO can prove to be the biggest IPO in India. According to reports, the company has set a target of collecting $ 6 billion through IPO. Through IPO, the government is planning to list a 5 percent stake of LIC in the stock market. If this IPO proves to be successful, then it will even beat Paytm’s IPO which came in November.
If reports are to be believed, 10 percent of the LIC IPO will be reserved for policyholders and 5 percent for employees. LIC’s IPO is going to prove to be the biggest IPO in the country.
According to reports, the government is about to issue 316 crore shares under its 5 percent stake. In such a situation, the embedded value of the company can be Rs 5.4 lakh crore. 35 percent of the IPO will be reserved for retail investors. In such a situation, policyholders can bid for shares up to a maximum of Rs 4 lakh.
Apart from this, the way has also been opened for 20 percent foreign direct investment in IPO. There will be no lock-in period for the policyholders after investing in the IPO. He can easily sell the shares on the day of listing.
How to take LIC IPO?
In LIC’s IPO, 10% shares will be reserved for LIC policyholders, but it is to be kept in mind that policyholders or retail investors, must have a Demat account.
Investors with any other insurance policy will have to apply in LIC IPO like normal retail investors.
How to buy LIC IPO?
LIC IPO: Every policyholder can invest up to Rs 2 lakh in IPO. The general condition for applying is that you have to update the PAN card and open a Demat account. LIC IPO is going to come before 31st March. The government has submitted a Draft Red Herring Prospectus (DRHP) to SEBI for disinvestment of LIC.
When will LIC’s IPO come?
The government aims to launch this IPO before March 31. But in the meantime, according to the news going on in the media, the IPO can be launched on 10 March 2022. LIC IPO Details: According to reports, this IPO will be open for investors on March 10 (LIC IPO Open Date), and will remain open till March 14.
What is there for the policyholder in LIC’s IPO?
The biggest IPO ever in the Indian stock market is about to come. This IPO will be of Life Insurance Corporation. The government plans to sell a 5 percent stake in LIC through this IPO. According to the Draft Red Herring Prospectus (DRHP), the quota for retail investors in the IPO will be 35%. 5 percent will be reserved for LIC’s staff and 10 percent for its policyholders. Discounts are also expected for both these categories. Staff and policyholders can bid up to a maximum of Rs 2 lakh in their respective quotas. This is the first time that quota has been fixed for policyholders of an insurance company in the Indian market. But not all policyholders of LIC will be able to apply for the policyholder quota. Let us understand what other rules have been set for the policyholders in this IPO.
- First of all, the DRHP for this IPO was deposited with SEBI on the 13th of February. To this date, only people whose name LIC will have a policy will be able to apply under the policyholder quota. But just being a policyholder will not get a chance to apply for this quota. The Demat account should also be in the name of the policyholder. Demat account of the husband or wife or son or relative cannot be used.
- Only policyholders of LIC who have linked their PAN with LIC policy will be able to apply for this IPO from the policyholder quota. The last date for linking it has been fixed as February 28. This linking can be done by visiting the LIC website by providing PAN information along with the policy number, mobile number, and email id of the policyholder. For this, you can go to https://linkpan.licindia.in/UIDSeedingWebApp/ or else this work can be completed by visiting LIC’s office there.
- 3. Now it is time to talk about one more thing related to this. There is such a case, in which even if PAN is linked, there will be a problem in applying for policyholder quota. This condition will be created when the Demat account of husband and wife is joint. Even though they have different policies in their name and they have linked their PAN as well, if they have a joint Demat account, then only one of them can apply from this quota. The question is, who would that one be? The answer comes from SEBI’s guidelines. According to it, both the beneficiary of a Demat account cannot apply separately for the IPO. Only the person who is the first or primary beneficiary can apply.
- 4. It was a matter of joint Demat account, but what if there is a joint life policy? In such a case, both the policyholders will be able to apply for this quota, provided they are the primary holders of the Demat account.
Here you are being told some special things about LIC’s IPO and through these you will get answers to many of your questions.
A1. In LIC’s IPO, 10 percent shares will be reserved for LIC policyholders, but it is to be kept in mind that policyholders or retail investors, must have a Demat account. This is because the equity shares of any company are issued only in the form of Demat.
A2. Investors with any other insurance policy will have to apply in LIC IPO like normal retail investors. There is no lock-in period for retail investors after getting shares in the IPO. Shares can also be sold immediately after listing.
A3. Under retail investors, you will be able to buy only shares up to Rs 2 lakh in IPO. At the time of IPO coming, it will be known at least how many shares will be able to buy.
A4. No tax exemption will be available on investment in LIC’s equity shares and profits will be taxed.
A5. It would be better if policyholders bid at the higher price in the price band of the IPO as the same price is finalized at the time of allotment of shares.
A6. If the policyholders are having a joint policy, then only one of the two can apply. Whoever is applying for IPO shares, his PAN number should be updated in the policy record and he should have a Demat account in his name. If the Demat account is also joint then the applicant should be the primary holder of the Demat account.
A7. Policyholders with lapsed policy can also apply under reservation. This means that any policy which has not been taken out of the records of LIC, All those policyholders can apply under the reservation portion.
A8. To link PAN with policy, go through the options on LIC’s website and simple process using your PAN number, policy number, mobile number, and email number and link it. Apart from this, you can also update the PAN number by visiting the LIC office.
A9. NRI Policy Holders Policyholders residing outside India cannot apply for its IPO.
A10. After the IPO, all the insured will be treated equally at the time of allotment of shares. There will be no difference in the amount of premium or the number of insurance policies.