The Life Insurance Corporation (LIC) will launch its initial public offer (IPO) on May 4, Wednesday. The issue will close on May 9, Monday, stated the insurer’s management during a press conference. In the IPO, staff and policyholders will be receiving a discount. According to the LIC DRHP filed with Sebi, up to 10 percent will be reserved for eligible LIC policyholders under the Policyholder Reservation Portion.
According to the LIC management, there is an employee reservation of 1.58 crore shares while 2.21 crore shares are reserved for policyholders. Retail and employees will get Rs 45 discount, while policyholders will get Rs 60 discount.
Here is a look at 5 things that policyholders who are looking to invest in the IPO via Policyholder Reservation Portion should know.
NRI LIC policyholders
Under the Policyholder Reservation Portion, LIC has put aside up to 10% of the shares sold in its IPO for its policyholders, and plans to offer a discount to these investors as well.
NRI policyholders and other policyholders who do not reside in India are not eligible to apply for the Policyholder Reservation Portion.
As per the FAQ section in the LIC DRHP, “Whether NRI policyholders or other policyholders residing out of India can apply in the Offer? No, only resident Indians can apply.”
Also read: Can NRI LIC policyholders apply for discounted IPO shares?
Demat account is must
If you are an LIC policyholder interested in participating in the insurer’s anticipated initial public offering (IPO), you must ensure that your PAN information is current in LIC’s systems and that you have a demat account.
The LIC published an advertisement in leading newspapers encouraging policyholders to update their Permanent Account Number (PAN) details and open demat accounts in order to participate in the anticipated initial public offering.
According to the LIC DRHP filed with SEBI, a policyholder who does not update his/her PAN before February 28, 2022 will not be eligible to participate in its IPO under the portion reserved for policyholders. According to the LIC DRPH, “A policyholder of our Corporation shall ensure that his / her PAN details are updated in the policy records of our Corporation at the earliest. A policyholder who has not updated his / her PAN details with our Corporation before expiry of two weeks from the date of the filing of this Draft Red Herring Prospectus with SEBI (i.e., by February 28, 2022) shall not be considered as an Eligible Policyholder.”
LIC policyholder with lapsed policy
Through the policyholder Reservation Portion, policyholders with lapsed LIC policies can apply for shares in the LIC’s initial public offering (IPO). All policies that have not exited LIC records due to maturity, surrender, or the policyholder’s death are eligible for reservation under the Policyholder Reservation.
Also read: Can an LIC policyholder with lapsed policy apply for discounted IPO shares?
Joint LIC policyholders
Under the Policyholder Reservation Portion category, only one of the two can apply for Equity Shares. In the insurance records, the PAN number of the applicant Bidding in the Offer (you or your spouse) must be amended. The applicant must have a demat account in his or her own name, and if the account is joint, the applicant must be the first/primary account holder. Click here to read more.
LIC policyholder under group policy
All policies other than group policies qualify for Bidding in the Policyholder Reservation Portion. According to LIC DRHP FAQ, “I am having a Pradhan Mantri Vaya Vandana Yojana policy. Whether I am eligible to apply for the Equity Shares of the Corporation in the Offer?
Read more: Are PMJJBY policyholders eligible for discounted LIC IPO shares?