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Five things to know about LIC IPO if you are a policyholder

In a major boost to its policyholders, the company has reserved up to 10% of the offer size for this category

Life Insurance Corporation of India (LIC) has applied for its much-awaited initial public offer (IPO) with the markets regulator and plans to sell 5% of its stake through an offer for sale (OFS). As per the insurance major’s draft red herring prospectus (DRHP), which was filed on 13 February, LIC boasts of nearly 29 crore policyholders and a 74.6% market share in terms of a number of individual policies issued for the financial year 2021.

In a major boost to its policyholders, the company has reserved up to 10% of the offer size for this category.

Further, the government, which owns 100% of LIC, plans to give a discount to the policyholders in the IPO. The government hasn’t as of now disclosed the issue size and is expected to announce in due course.

If you are an LIC policyholder and looking to invest in the IPO, here are a few things to note.

Bidding: Policyholders should note that the equity shares in the IPO will be allotted to all successful bidders only in the dematerialized form, meaning investors should have a demat account for applying in the offer.

Further, a policyholder cannot apply from the demat account of his or her spouse or son or a relative.

Policyholders bidding under the ‘Policyholder Reservation Portion’ can bid through the Applications Supported by Blocked Amount (ASBA) and the UPI mechanism. As per the draft prospectus, the total value of allocation to an eligible policyholder cannot exceed ₹2 lakh after discount.

Bidding in IPOs is done in a ‘lot’, which is the minimum number of shares that an investor needs to bid for.

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