LIC IPO: Benefits for Policyholders

18 Feb, 2022

7 min read

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All policyholders must ensure that their PAN data are updated in their policy records in order to be regarded as an eligible policyholder for the next public issuance.

LIC IPO is the new buzz of the town! The government has declared a LIC IPO for policyholders to reflect this. Want to discover what the excitement is all about? We're here to give you a quick rundown of what it is and why it's been making the rounds.

Users who hold insurance with the Life Insurance Corporation now have a cause to be thrilled. In its impending IPO, LIC has introduced a special category for policyholders. Users who are policyholders of LIC plans are eligible to apply for the IPO under this category, up to a sum of INR 2,00,000. Policyholders in the LIC IPO would be entitled to up to 10 percent of the issue amount, according to the Indian government. A drop in the basic price is also expected for this group of investors.

The categories for the LIC IPO will be supported by brokerages. Users may now apply under the Policyholder category for the IPO. The limit of investment is INR 2,00,000. Please note that in the LIC IPO, a user may apply under the Policyholder category in addition to the standard retail category. Two distinct applications will be evaluated for the user in such a circumstance.

Click to apply for LIC IPO

LIC IPO Benefits to Policyholders

Over and beyond the retail application, policyholders will have the option to invest individually in the mentioned category. This would improve their prospects of receiving a share of the offering. With Angel One, the application procedure for this category is fairly simple. All you have to do is choose the LIC IPO for the policyholder category and then put your bid. This category will be evaluated for your submission.

In order to be able to apply through the Policyholder Category, you have to guarantee that the PAN used for LIC insurance must be the same as the one registered with Angel One's Demat Account.

Please keep the following in mind as you prepare to apply for the IPO:

– To change your PAN, Date of Birth, Policy Number, and Email ID, go to the LIC India webpage. This is to check that you have completed your KYC requirements in order to apply for the LIC IPO for the policyholder category.

– You may verify whether your PAN is registered with your policy by visiting the site: https://linkpan.licindia.in/UIDSeedingWebApp/getPolicyPANStatus?

– Alternatively, you may contact your LIC agent for help.

 

Steps to apply through Policyholder Category

  • Choose LIC from the list of initial public offerings.
  • Go to the IPO information page.
  • Select the “Policyholder” category and click apply now
  • Fill out the bid form and submit it.
  • Following the submission, you will get a mandate from the sponsor bank.
  • Your application will be successful upon your acceptance of the requirement

LIC IPO Effect on Policyholders

With a total first-year premium of over 1.844 lakh crore in the fiscal year ending March 2021, LIC is India's biggest life insurer. It owns more than 66 percent of the market. LIC is India's largest institutional investor, with a sizable investment portfolio.

Its employee reach is extensive with 2.9 lakh workers and a network of 22.78 lakh agents. Given the success of past PSU IPOs like IRCTC, this comes with a considerable expectation of successful listing. This is surely a good event for retail investors with the unveiling of the policyholder category.

By February 28, policyholders must update their PAN information

Policyholders who want to participate in the Life Insurance Corporation's (LIC) Initial Public Offering (IPO) should update their PAN information in their policy records by February 28, 2022. Policyholders may do so by going to the insurer's PAN registration page online. The government-owned life insurance has set aside approximately 10% of the offer size for policyholders, in order to let its current 28.26 crore policyholders profit from the massive IPO issue.

Those who have one or more policies as of February 13, 2022, are eligible to participate in this promotion and get a discount. Over 3.16 crore shares are on sale, according to LIC's draft red herring prospectus (DRHP). It also has a separate reserve for its workers, known as the Employee Reservation Portion, which is limited to 5% of the company's post-offer equity share capital.

In addition, workers bidding in the Employee Reservation Portion may use the ASBA and UPI mechanisms to bid, and qualified employees can sell their shares if they like, according to the preliminary documents. Under the 'Employee Reservation Portion,' retired LIC personnel are unable to do so. Existing workers with a Demat account in their name are 3also eligible to apply.

Final Thoughts

Brokerages will accept LIC IPO applications prior to the IPO's launch date. This implies that you may apply for the LIC IPO before it opens in both the retail and policyholder categories. You do not need to attend the IPO open day rush hour. On the IPO open day, your application will be sent to the exchange.

You may now go ahead and finish all of the LIC IPO criteria so that you'll be ready to go whenever the dates are published.

 

Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.

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