With the final quarter of FY 22 drawing to an end, the entire nation is waiting for the blockbuster initial public offering of Life Insurance Corporation. The Government of India is all set to file the Draft Red Herring Prospectus of LIC IPO with the Securities and Exchange Board of India (SEBI), the market regulator.
The filing is likely to happen by the second week of this month, as per sources. The Finance Minister of this nation, Nirmala Sitharaman, also mentioned in her Budget 2022-23 speech that this mega public offering is expected shortly.
So, if you are a policyholder of this nation’s largest insurance provider and wish to take part in its upcoming public issue, you need to keep a couple of things in mind before you do so.
Find out more on this in the next section!
A Closer Look at Key Factors
In this upcoming mega-IPO, LIC will reserve up to 10% of the entire issue size for the company’s policyholders.
So, to participate in the nation’s biggest-ever initial share sale, LIC policyholders will need two things in particular. They are:
PAN Linked Policy Account
Life Insurance Corporation has already requested the policyholders to update their PAN details to ensure their smooth participation in its upcoming initial public offering. If you are a policyholder of this insurance giant and wish to check whether your PAN is linked with your policy, you can go through the simple steps mentioned below.
Step 1: Visit https://linkpan.licindia.in/UIDSeedingWebApp/getPolicyPANStatus.
Step 2: Type in your Policy Number, PAN and Date of Birth.
Step 3: Proceed with the Captcha verification.
Step 4: Click on Submit.
Following these simple steps will help you check the status of your PAN and LIC policy link.
Veteran investors already know the importance of a Demat account in terms of trading in the stock market. However, if you are a beginner, you should know that this account is one of the crucial requirements for selling or buying shares in the exchanges.
Depository organisations such as CDSL and NSDL maintain these Demat accounts. One needs documents like PAN, Aadhaar and address proof to create such an account. Life Insurance Corporation currently has more than 25,00,00,000 policyholders compared to only 8,00,00,000 Demat accounts in the nation. Going by this data, a significant section of LIC policyholders needs to create Demat accounts to participate in this upcoming mega-event.
The Government of India aims to meet the revenue estimates for the current fiscal amounting to Rs. 78,000 crores through this initial share sale. So far, GOI has garnered around Rs. 12,000 crores through the privatisation of Air India and divestment of stake in other Public Sector Undertakings.
In terms of the Number of Schemes/Policies and New Business Premium (NBP), Life Insurance Corporation, at present, has the highest market share. As of December 2021, this company’s market share for NBP stood at nearly 66%, which was much higher than the cumulative market share of the other existing private players.
In addition, due to the craze for this LIC IPO, several individuals are even purchasing new policies to be eligible for this initial share sale. So, if you too are keen on subscribing to LIC’s public issue, keep the above-mentioned factors in mind and do so only after conducting your own research.
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Frequently Asked Questions
Why is Life Insurance Corporation regarded so highly in India?
Life Insurance Corporation remains the largest insurance company in India after more than 20 years from the privatisation of the Insurance Sector. It is the only PSU to remain the market leader after the privatisation and entry of many newer private players.
What are Life Insurance Corporation’s plans for the future?
Life Insurance Corporation has plans to hire more young employees to keep up with the changing demographics and focus more on health insurance, pension, annuity products and ULIP.
How much has the Government of India raised through disinvestment in FY 22?
The Government of India has gathered around Rs. 12,000 crores as of February 2022 through disinvestment in FY 22.
Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.