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LIC IPO for Policyholders Subscribed Over 4 Times; Price, Discount, All You Need to Know

LIC IPO: The mega LIC IPO, which opened on Wednesday, May 4, has seen a strong response so far, especially from policyholders of the company. The initial public offering (IPO) of India’s largest insurer, Life Insurance Corporation, will be open to public till May 9, Monday. As of 12:30 PM on Saturday, the LIC IPO was subscribed 1.44 times, with LIC policyholders bidding for 4.19 times the shares reserved for them, as per data from the NSE. The government is offloading 3.5 per cent stake in the company. The LIC IPO would remain open on Saturday (May 7) and Sunday (May 8) between 10 am and 7 pm, NSE has said.

The government is looking to mop up Rs 21,000 crore through this issue. Anchor investors have already funded Rs 5,000 crore in the LIC IPO.

Weeks prior to the opening of the issue, LIC IPO for policyholders was being encouraged by the government as well as the insurance giant, with lakhs of policyholders receiving notifications urging them to subscribe to the issue. Here is everything you need to know about LIC IPO for policyholders.

What is LIC IPO Policyholders Quota?

In a first of its kind, the government has allotted a separate 10 per cent of the LIC IPO shares for LIC policyholders, where 2,21,37,492 shares are reserved for the group. They are also getting a discount if they book the issue.

“Policyholders have also made this company. We now invite them to be shareholders. We want to invite millions of Indians to participate in this process, as LIC unlocks its value,” said Tuhin Kanta Pandey, secretary of the Department of Investment and Public Asset Management (DIPAM).

LIC IPO for Policyholders: Discount 

LIC policyholders will get a discount of Rs 60 if they bid through the policyholders quota, the company has said. The price band for LIC IPO has been set at Rs 902 to Rs 949 per equity share. This means, for LIC Policyholders, LIC IPO share price will be Rs 849 apiece at the higher end of the price band. For employees and retail investors, a discount of Rs 45 each is being provided.

LIC IPO for Policyholders: Who is Eligible?

LIC policyholders who have a policy that is linked with a valid PAN number will be eligible to get the policyholders’ discount and apply through the quota. LIC policyholders will also need a demat account to apply to the IPO, and have to ensure that the same PAN is linked to the policy as of February 28 this year.

Those who have group policies will not be able to bid under this quota, while all other policies are eligible to qualify.

“Bids by eligible policyholders may be made at cut-off price…only those bids, which are received at or above the offer price, net of the policyholder discount would be considered for allocation under this portion,” the red herring prospectus of the LIC reads.

How to Apply for LIC IPO for Policyholders?

Eligible LIC policyholders can use online banking apps or depository platforms like Groww, Zerodha and Upstox and look for the policyholders’ quota to apply for the LIC IPO. They can bid a maximum of 14 lots with 15 shares each, and have to make payment via UPI or ASBA.

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