The initial public offering (IPO) of state-owned insurance behemoth Life Insurance Corporation of India (LIC) is set to hit D-Street on May 4, 2022. The ₹21,000-crore worth LIC IPO will be the biggest IPO in the Indian stock market history.
The price band for the public issue—which will close on May 9, 2022—has been set at ₹902-949. The LIC IPO is entirely an offer for sale (OFS) by the government of India who will sell a 3.5% stake or 22.13 crore shares in the company.
There are certain benefits in the LIC IPO for policyholders and employees alike.
- LIC has reserved 10% or 2.21 crore shares for policyholders, and 15.81 lakh shares, or 0.7%, for its employee in the IPO.
- Further, a discount of ₹60 will be given in the LIC IPO for policyholders, provided their PAN Card is linked to the policy, while its employees and retail individuals will a ₹45 discount.
The government plans to attract millions of retail investors to subscribe to the LIC IPO. The discount being offered to the policyholders and retail investors is seen as an approach to reward and lure a huge number of retail individuals to the IPO. The market lot size is 15 shares, and a retail-individual investor can apply for up to 14 lots.
If an LIC policyholder is also an employee of the company, he can apply for LIC IPO under three categories separately:
- LIC Policyholders
- LIC Employees
- Retail Individual Investors categories
Currency, LIC has about 25 crore policyholders. Eligible policyholders will be able to apply for the “Policyholders Reservation Portion” at the cut-off price.
In order to apply under the LIC IPO policyholder reservation category and avail the discount benefit, the policyholders need to link their PAN with their LIC policy.
Policyholders who have failed to link their PAN with policy can still apply under the retail investors quota and get a discount of ₹45.
The price band for LIC IPO is ₹902-949. Check out the following details on the effective final price after the discount for each category:
| Category | Discount | Final Price |
| HNI | No | ₹949 |
| Retail | ₹45 per share | ₹904 |
| Employee | ₹45 per share | ₹904 |
| Policyholders | ₹60 per share | ₹889 |
To avail the LIC Policyholder Reservation Portion, policyholders should ensure that their Demat account matches with the PAN linked to the LIC policy.
In the case of joint LIC policyholders, only one of the two can apply for LIC IPO under the Policyholders Reservation Portion. The applicant must be the first/primary account holder.
Meanwhile, policyholders with lapsed LIC policies can also apply for LIC IPO through the Policyholder Reservation Portion. If you are just getting started with your investment journey you can consider opening a Demat Account with HDFC Bank. The process is fast, simple and hassle-free, allowing you to focus on your investments.
You can click here to open a Demat Account now!
*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice before you take any/refrain from any action.