LIC IPO: Life Insurance Corporation of India (LIC) has submitted the draft Red Herring Prospectus (DRHP) at SEBI (Securities and Exchange Board of India). The DRHP informs that through this public issue, the Government of India (GoI) plans to sell its 5 per cent stake in the company. The DRHP further clarifies that 35 percent of the public offering will be reserved for retail investors, 5 percent will be for LIC employees, while 10 percent of the public offering will still be reserved for its policyholders. Therefore, the LIC insured may apply both in the category of Individual and Insured. However, there are some important details for LIC policyholders to know before the opening date of an LIC subscription to avoid chances of their application being rejected.
Here we list out top 5 LIC IPO details that policyholders must know:
1] LIC Policyholder Eligibility: The LIC of India submitted its DRHP on Feb 13, 2022. Therefore, life insurance policy holders who got LIC policy on or before Feb 13, 2022 will be eligible to apply in the policyholder category. Those who purchased a life insurance policy after February 13 will not be able to take advantage of the 10 percent policyholder participation.
2] PAN LINK WITH LIC POLICY: LIC policyholders who wish to claim the 10 percent of quota benefits reserved for policyholders are recommended to check if their policy is classified with PAN. In the event that your Personal Account Number is not linked to your LIC policy, your application will be rejected if you apply under the insured category.
Therefore, LIC policyholders considering applying for a LIC IPO are advised to check the PAN link status online at the LIC direct link: linkpan.licindia.in/UIDSeedingWebApp/getPolicyPANStatus.
In case a policyholder's PAN is not linked to their LIC policy, they can link it online by logging in to the LIC link: linkpan.licindia.in/UIDSeedingWebApp.
However, a policyholder must remember that the last date to link a PAN policy is February 28, 2022. LIC policyholders linking their policy with their PAN after this given deadline won't be able to claim the 10 percent quota reserved for policyholders.
3] Rule for joint policy holders: “In the case of joint Policyholders, the Policyholders are insured and, therefore, both can apply separately under the Policyholders’ participation in the same policy, provided both have separate Demat account," Anuj Gupta, Vice President at IIFL Securities said.
4] Joint Demat Account: "An IPO request can be forwarded from a Demat account. In the case of the LIC document holder, who owns the joint Demat account, it is recommended to check whether he is the main Demat account holder or not. Anuj Gupta of IIFL Securities said account holders will not be able to apply for a life insurance company initial public offering (LIC) in the policyholder category.
5] Which policyholders can apply under 10% quota: Apart from a group policy, all policyholders have the right to apply under the category of policyholders as long as they meet other requirements.
Apart from this, NRIs with LIC policies will not be able to apply under the insured reserved quota and there will be no blackout period for insureds who have applied under the insured category.
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