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LIC IPO guide for policyholders: size, discounts, must do things

The first public offering of more than 31.6 million shares, or five percent of the government’s stake will be on the market in March. Employees and policy owners of the insurance giant would be able to get a cut over the cost of the floor.

India’s largest public offering is slated to go on the market. Life Insurance Corporation of India (LIC) has filed the Draft Red Herring Prospectus (DRHP) with the capital regulator Securities and Exchange Board of India (Sebi) to facilitate the transfer of a five percent stake to the government. Policyholders and employees of the country’s most renowned insurance company would receive a cut over the price of the floor.


Prior to applying for the LIC’s IPO applicants must be aware of some specifics.


The first public offering of more than 31.6 crore shares , which is five percent of government’s stake will go live in March. Employees and policy holders of the insurance giant will be able to enjoy a discounted rate over the cost of the floor.


While the draft documents do not provide the market value of LIC according to the industry norms, it will be three times embedded value, which is around 16 lakh crore.

“The DRHP of LIC IPO has been filed today with the SEBI. For filing valuation about 31.6 crore shares are on offer representing 5 per cent equity,” Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey tweeted.

Sources from the merchant banking industry said that the government expects to collect up to 63,000 crore (about USD 8 billion) from the IPO as per PTI. PTI report.


This LIC IPO is an offer for sale (OFS) by the Government of India and no new issue of shares is planned through the Life Insurance Corporation (LIC). The government holds a 100 percent of the shares and over 632.49 millions shares with LIC.

It is worth Rs.10 per share.


The LIC IPO will be the largest IPO ever recorded in the Indian stock market. Once listed, the market value of LIC will be comparable to the highest companies such as RIL as well as TCS.

As of now, the sum generated by Paytm’s IPO of Paytm in 2021 was the biggest ever, at nearly the sum of Rs 18,300 crore. This was then Coal India in 2010 at close to Rs 15,500 crore, and Reliance Power in 2008 at 11700 crore.


The government’s draft documents did not mention the discount that would be provided to policyholders and LIC employees who participate in the public offer.

But, as per rules that up to 5 percent of the issue size may be reserved for employees , and up to 10 percent for policy holders.


The policyholders who plan to invest in the LIC’s IPO should ensure they have their permanent account Numbers (PAN) have been in good standing to Life Insurance Corporation of India.


In addition, policy holders require DEMAT accounts for the LIC IPO.

“In order to participate in any such public offering, policyholders will need to ensure that their PAN details are updated in the Corporation’s records,” LIC had stated in a 2021 advertisement.

“Further subscribing to any public offering in India is only possible if you have a valid DEMAT account,” LIC had stated in its advertisement.

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