LIC IPO guide for policyholders: Must do thingsOn April 20, 2022 by Drake
The first public offering of 31.6 million shares, which is five percent of the stake held by the government is expected to go live in March. Employees and policy owners of the insurance giant would be able to get a cut over the cost of the floor.
India’s biggest public offering is slated to launch as Life Insurance Corporation of India (LIC) submitted an Draft Red Herring Prospectus (DRHP) with the capital regulator Securities and Exchange Board of India (Sebi) to facilitate the purchase of a five percent stake to the government. The employees and policy holders of the nation’s biggest insurer will receive a reduction over the cost of the floor.
In order to apply for the LIC’s IPO the policyholders should be aware of certain details.
LIC IPO DATE
The first public offering of 31.6 million shares, or five percent of government’s stake will go live in March. Employees and policy holders of the insurance giant will receive a reduction over the price of the floor.
LIC IPO SIZE, VALUE
While the draft documents do not provide the market value of LIC in accordance with the industry norms, it will be three times embedded value, which is around 16 lakh crore.
“The DRHP of LIC IPO has been filed today with the SEBI. For filing valuation about 31.6 crore shares are on offer representing 5 per cent equity,” Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey tweeted.
According to sources from the Merchant Banking sector, the government expects to earn up to 63,000 crore (about USD 8 billion) from the IPO according to PTI. PTI report.
LIC IPO PRICE
This LIC IPO is an offer for sale (OFS) by the Government of India and no new issue of shares is planned from Life Insurance Corporation (LIC). The government holds a 100% stake, and over 632.49 million shares of LIC.
Shares are worth Rs.10 per share.
BIGGEST IPO IN HISTORY OF STOCK MARKET
The LIC IPO is expected to be the largest IPO ever recorded in the Indian stock market. Once listed, the market value of LIC will be comparable to the highest companies such as RIL or TCS.
To date, the sum raised through Paytm’s IPO of Paytm in 2021 was among the highest ever with a record of 18300 crore. It was then Coal India in 2010 at close to Rs 15,500 crore, and Reliance Power in 2008 at 11700 crore.
LIC IPO DISCOUNTS FOR POLICYHOLDERS
The draft papers of the government did not mention the discount to be offered to policyholders or LIC employees who participate in the public offer.
According to the guidelines according to the rules, up to 5 percent of the issue size may be reserved for employees , and up to 10% for policy holders.
LIC-PAN LINK, DEMAT ACCOUNT MUST
Insurance policyholders planning to invest in the LIC’s IPO must make sure they have their permanent account Numbers (PAN) is in good standing to Life Insurance Corporation of India.
Other than that, policyholders need DEMAT accounts in order for the LIC IPO.
“In order to participate in any such public offering, policyholders will need to ensure that their PAN details are updated in the Corporation’s records,” LIC had stated in its advertisement for 2021.
“Further subscribing to any public offering in India is only possible if you have a valid DEMAT account,” LIC stated in the advertisement.