India’s biggest insurance provider, LIC, is planning to go public with its IPO set to hit the bourses in the last month of this financial year. The buzz around this public issue is skyrocketing as it will be India’s largest IPO to date with a valuation of about Rs. 70,000 crores.
On the eve of this public issue, LIC has issued some notable clarification regarding policyholders who are eligible for the special quota. To provide some context, India’s largest insurance provider has set aside a quota of shares for policyholders and its employees. Here, they will get preference and discounts during the IPO allotment.
A Quick Glance into This Matter
In a recent press statement, Life Insurance Corporation has shed light on the policies that will not come under this quota. For instance, any group insurance plan, including the Pradhan Mantri Jeevan Jyoti Bima Yojana or PMJJBY, will not be a part of this special quota.
Apart from that, here is a list of policies that will not be a part of this quota –
New One Year Renewable Group Term Assurance Plan-I
New One Year Renewable Group Term Assurance Plan-II
Group Credit Life Insurance
New Group Leave Encashment Plan
Group Immediate Annuity
One Year Renewable Group Micro Term Assurance Plan
New Group Superannuation Cash Accumulation Plan
New Group Gratuity Cash Accumulation Plan
Single Premium Group Insurance
As stated in its DRHP, policyholders of LIC can apply for up to Rs. 2 lakh under the ‘policyholder reservation portion’ using the UPI or ASBA process. Moreover, the insurance company has set aside 10% of its issue size for this purpose.
The buzz is real, as explained by the honourable Finance Minister of India.
A Closer Look at LIC IPO
This public sector insurance company is leading the insurance segment in India with more than 60% under its belt. This IPO comes as a part of the Indian Government’s disinvestment plans that will help to close the fiscal deficit and fund other purposes.
This IPO was announced as a part of the previous year’s Union Budget, but considering the size of LIC, both in terms of customers and turnover, it took almost a year to submit its DRHP. Also, one must not discount the number of rule changes that had to be made with various regulatory bodies to accommodate this public issue. Additionally, this will be an offer for sale only, and the Government has agreed to divest only 5% of LIC in this IPO.
Nonetheless, the finer details are yet to be made public, but experts are predicting a March 2nd week opening of bids, i.e. around 10 March 2022 or 11 March 2022.
This public issue of LIC has a lot of hype around it, and rightly so. The company delivers profit year after year, and it is synonymous with life insurance in India. Therefore, if you are planning to apply for it, it is advisable that you do your own study before that. Moreover, if you are applying through this policyholder quota, make sure you have read all the terms and conditions before moving ahead.
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Frequently Asked Questions
What is the face value of LIC shares in this IPO?
The face value of LIC shares in this IPO is Rs. 10 per equity share.
What is the employee quota of this LIC IPO?
The employee quota of this public issue of LIC is set at 5% of the total issue size.
Can I apply for this LIC IPO through the Angel One platform?
Yes, you can apply for this public issue of LIC using the Angel One platform.
Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.