The government is all geared up to sell a small chunk of the shareholding to list the largest life insurer that is the life insurance corporation of India. The initial public offering or the IPO comes with several advantages for people who own the insurance policies of the company. Around 29,00,00,000 policyholders and it dominates a market share of 74.6% in the terms of individual policies issued in the fiscal year 2021. LIC IPO has created a market buzz without a doubt because the company has created a reservation port for policyholders and employees while such investors will get a discount on the issue price. While there is 10% reservation for the policyholders besides some discount.
Lic has reserved at least 10% of the issue size for the army of policyholders and it also plans to give some discount to some investors in the IPO. Employees of the insurance company also have a code for themselves with 5% of the issues as reservation just like the policyholders. Policyholders may get some additional discount also as per ansuman kanna who is director at value prolific consulting services. For example the issue price of the lic IPO is ₹1500 then the policyholder will get it at ₹1350 per share which will give them an additional upside.
Cap on investment
Investors holding lic policy unlikely to not exceed the investment more than ₹2,00,000 as several investors come under the retail category. Some investors can bid under the policyholder reservation portion through the applications that are supported by the block amount and the UPI mechanism. The policyholders have updated the pan by 28 February 2022 can apply under the policyholders Cortana as it is mandatory to link pan and have a demat account to apply for the IPO.
Process to link your pan details with the LIC:
- Firstly you need to visit the official website of the life insurance corporation of India.
- Then you need to keep your policy number ready besides pan details and date of birth and email ID which must be filled while you are updating your pan.
- You can use the above link to update the records for all the lic policies.
- You can also check if the pain is registered in the policy or not by visiting the companies website.
- If you need anymore help you can also connect the lic agent
Joint life policyholders
You can apply as one of the policy members apply under the policy reservation portion category if you own joint policy of the company. The pan number of the applicant building in the offer must be updated while you are linking the pan card. Additionally the policy member applying for the IPO must have a demat account in their name and in case the demat account is joint then the applicant needs to be the first or the primary holder of the demat account.
All the policies that have not exited under the companies record by maturity surrender or by the death of the policyholder are likely to be eligible for the policy holder reservation.
If you have applied for policy but you have not received the policy document in that case you can consider the draft red herring prospectus as it tells that the policy should not have been issued on or before the date when the prospectus was filed that is on 13th February 2022.
If you are a LIC policyholder and you were allotted equity shares under the reservation category you can sell the shares whenever you want as per your choice. The policyholders with joint accounts can also participate in the upcoming IPO 2022 as per the stock news but only one of the 2 policyholders can apply for the shares under the reservation portion.
Lastly you need to know that the maximum investment for lic policy holder was not employed at LIC ₹4,00,000 and it is ₹2,00,000 under policyholder category and ₹2,00,000 under retail category. The maximum investment possible for lic employee is ₹6,00,000 provided that the lic policy is also ₹2,00,000 under lic employee category. Hence these all points are very important when it comes to investing in the IPO or applying for it.