LIC is going to introduce an IPO in March. Its draft Red Herring Prospectus (DRHP) has not told anything about the size of the issue. However, it is believed that the government will sell its 5 per cent stake in this issue. The size of the issue can be Rs 50,000 to 90,000 crore.
For the first time an insurance company is going to fix quota for policyholders in IPO. Let us know the things that every policyholder should know before the issue comes.
How many shares will be reserved for policyholders in LIC IPO?
LIC has not told how much part of the issue will be reserved for policyholders. However, its limit will be 10 percent. The DRHP states that the quota issued for policyholders will not exceed 10 percent of the issue size. A policyholder maximum will be able to bid for shares worth Rs 2 lakh.
Also read: Enthusiasm in policyholders regarding LIC’s IPO, 70 lakh people updated till now: Chairman
How do I know that I can take advantage of the quota fixed for the policyholder?
People who have a single policy of LIC till February 13, can apply for policyholders under the reserve quota when the issue opens. This means that if you have purchased the policy after February 13, then you will not be entitled to apply under the reserve quota of the issue. Even if you get an annuity, you will be able to apply for IPO.
There is a discussion that LIC will give discounts to its policyholders in IPO, how much discount can you get?
LIC’s policyholders are expected to get discounts at the issue price. However, the company has not yet told about this. The IPO can tell about the discount 1-2 days before coming to the market. Shyam Shekhar, founder of Ithot Financial Consulting, was that 5 to 10 percent would be a very good discount.
LIC PAN is increasing awareness to update, but I have not completed the process yet, do I have full time to update it?
It is very important to update PAN in LIC records. You should complete the updation process on the portal of LIC by 28 February.
I do not have a demat account, can I use my parent or wife’s demat account to apply in IPO.
To participate in this issue, it is very important to have a demat account. You cannot apply to IPO from another account.
My mother has made me a nominee in her policy, can I apply under quota?
No, quota is only for policyholders and not for benefit. Therefore you will not be able to apply.
