LIC IPO: Ahead of its mega IPO, Life Insurance Corporation of India (LIC), government is banking big on retail investors including its policyholders. On Sunday, the state-run Life Insurance Corporation of India (LIC) has confirmed its plans to create policyholder quota and offer them discount to issue price in its much-awaited draft papers.
LIC IPO: Portion Reserved for Policyholders
The portion planned to be reserved for policyholders can go up to maximum of 10 per cent. “The aggregate of reservations for eligible policyholder(s) shall not exceed 10 per cent of the offer size,” the DRHP stated. The quantum of potential discount will be specified closer to the bid opening date, at least two working days prior.
LIC IPO: Can Policyholders with Lapsed Policies Apply?
Under the policyholder reserved portion, the policyholders who have a policy in a lapsed condition will also be eligible to apply for shares in LIC’s initial public offering.
“All policies which have not exited our records by way of maturity, surrender or by way of death of the policyholder are eligible for reservation under the Policyholder Reservation Portion,” says the draft red herring prospectus of LIC.
LIC IPO: Policyholders Without Documents
“To be eligible for reservation under the Policyholder Reservation Portion category, the policy should have been issued on or before the date of this Draft Red Herring Prospectus and should not have exited by way of surrender, maturity or death claim on the Bid/Offer Opening Date,” says the DRHP.
LIC IPO: Demat Account Mandatory for Policyholders
Policyholders, who intend to apply for share of LIC, will need to have a demat account. As per SEBI ICDR Regulations, no equity share can be issued by any company in physical form, and the equity shares can only be issued in dematerialised form.
LIC IPO: Are Joint Life Policyholders eligible?
Only one of the two can apply for the equity shares under the Policyholder Reservation Portion category. The PAN number of the applicant bidding in the offer (you or your spouse) needs to be updated in the policy records. The applicant has to have a demat account in his/her name, and in case the demat account is joint, the applicant needs to be the first /primary holder of the demat account.
LIC IPO: Maximum Bid per LIC Policy
Individual, resident Indian policyholders with one or more LIC policies as on the date of DRHP and bid/offer opening date will be eligible to apply under this reserved portion. The maximum bid per policyholder is capped at Rs 2 lakh. Policyholders who fail to update their PAN details by February 28, 2022 will not be eligible for this quota.
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