LIC IPO: What Retail Investors, Employees And Policyholders Need To Know

How many LIC shares can you apply for if you are an LIC employee and policyholder?

<div class="paragraphs"><p>Filling forms. (Photographer: Akio Kon/Bloomberg)</p></div>
Filling forms. (Photographer: Akio Kon/Bloomberg)

The sheer size of Life Insurance Corp.'s planned initial public offering means that the allocation for policyholders, employees, non-institutional and retail investors categories will be much bigger than any other Indian maiden offer.

India's largest life insurer has reserved 57.5% of the total issue size of 31.62 crore for policyholders, employees, non-institutional and retail investors, according to the draft red herring prospectus.

The government is looking to raise over Rs 65,000 crore from a 5% stake sale in LIC. Bloomberg reported that the initial public offering will be priced between Rs 2,000-2,100 apiece.

The insurer has reserved 5% and 10% for employees and policyholders, respectively. Net of these two categories, 35% is set aside for retail investors.

The total value of the shares available per application for each of these categories is capped at Rs 2 lakh.

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LIC has a special reservation of 3.16 crore shares for its 26-crore policyholders. But only those who have linked their PAN with their policies and have demat accounts are eligible to invest.

A policyholder can apply for shares worth up to Rs 4 lakh—Rs 2 lakh each under policyholder and retail categories. Both the applications, even if from the same demat account, will be valid

There will be no lock-in period for policyholders and they can sell on listing.

Eligible Policyholders

  • Must have a valid demat account in their own name.

  • The PAN number of the applicant needs to be updated in the policy records by Feb. 28.

  • In case of a joint life policy, two policyholders can apply; they should be primary holders of the demat account through which the application is filed.

  • The policyholder must reside in India at the time of the bid/offer period.

  • The policy should have been issued on or before the date of the draft prospectus.

  • All policies that have not matured or have not been surrendered or have not exited records on the death of the policyholder are eligible.

  • The proposer of the policy for a minor child.

  • A 'karta' or head of the Hindu Undivided Family holding the HUF policy.

Not Eligible

  • Group policies.

  • The spouse of a deceased policyholder receiving annuity.

  • Nominees.

How To Link PAN To Policy

PAN can be updated on the LIC website with the PAN number, the policy number, the mobile number and email the ID of the policyholders. Policyholders' PAN number can be updated through a very simple process.

Here's the link to the page:

Alternatively, policyholders can also approach LIC offices.

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Employees of LIC have a separate quota of 1.58 crore shares, and they are also allowed to apply in the retail category, subject to meeting other conditions. Meaning, they can apply for shares of up to Rs 4 lakh.

And an employee who is also a policyholder can apply in retail and policyholder categories as well—or for total shares worth Rs 6 lakh. All three applications will be considered valid.

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