How can I apply as a policyholder for the LIC IPO? This article describes how to apply for a LIC IPO in the “LIC IPO for Policyholders” category.
On the Indian stock market, the LIC IPO will be the largest ever. The most efficient technique for increasing your chances of acquiring the IPO is to benefit from the “LIC IPO for Policyholders” category, which is just for LIC IPO for Policyholders.
This article will discuss why it’s so advantageous to get the LIC IPO? What is the LIC’s history? There is much more.
What are the pros of investing in the LIC IPO?
Since Nirmala Sitharaman, the national finance minister, planned in the 2021 Union Budget to launch an initial public offering (IPO) for India’s state-owned Life Insurance Corporation (LIC), there has been much expectation and worry among investors.
Due to the size of the sale and the ownership structure of LIC, the transaction has been dubbed “India’s Aramco moment” in comparison to Saudi Aramco’s 2019 initial public offering. It would be the most extensive initial public offering in Indian stock market history.
If listed, LIC’s market value would be similar to that of leading corporations such as RIL and TCS. Paytm set the previous IPO record of 18,300 crores in 2021, followed by Coal India in 2010 (15,500 crores) and Reliance Power in 2008. (Rs. 11,700 crores).
The current Russia-Ukraine conflict has pushed back the debut date, creating unanticipated financial market volatility. The debut date and pricing have not been published, heightening expectations and conjecture.
Why is it a good investment as per statistics?
Back in 1956, when the Indian government combined and nationalized 245 insurance firms and provident societies as the Life Insurance Corporation of India (with a capital commitment of Rs. 5 crores).
Since then, it has weathered the test of time and grown enormously in terms of its broad customer base, massive staff base, and the most significant assets and equities contributing to India’s economy.
Brand LIC was ranked third most substantial and tenth most valuable global insurance brand in 2021 (according to Brand Finance’s “Insurance 100-2021 Report”).
As of March 2021 (the most recent financial year), with an average of 29 crore policyholders and an income of Rs. 703,709.45 crores, one can see why this is the next big thing in investing, given its government backing, enormous client base, and consistent development over the years.
LIC At The Upcoming IPO In India
LIC has sent SEBI a Draft Red Herring Prospectus (DRHP). According to the DRHP, the Indian government aims to sell its 5% stake in the company via this public sale. Issue date for this upcoming IPO in India is 04 May 2022.
The DRHP clarifies that 35% of the public offer would be allocated for retail investors, 5% for LIC staff, and 10% for LIC policyholders.
How can I apply as a policyholder?
- Criteria for Eligibility:
A policyholder may apply for equity shares at the cut-off price. One subtracts the discount from the number of equity shares distributed to the policyholder to achieve this price.
Under this category, the maximum bid amount would be Rs. 2 lakh net of policyholder discount.
All policies that have not been retired from LIC’s records due to maturity, surrender, or the policyholder’s death are eligible for reserve under this category.
- Procedure for Bidding:
Policyholders may bid using the Applications Supported by Blocked Amount (ABSA) system, including the UPI. Policyholders who bid at a price within the price bank may pay the bid amount at the bid time.
As part of the UPI process, policyholders who want to use ASBA forms must send them to syndicate members, top 10 stock brokers in India, or other depository participants. Additionally, all ASBA bidders will be required to maintain a sufficient credit balance on their ASBA accounts.
What are the requirements to apply as a policyholder?
- A Pan Card That’s Connected to Your LIC Policy
- A PAN (Permanent Account Number) is associated with a Life Insurance Company policy.
- To determine if your PAN is associated with your LIC insurance, please visit the following link: https://linkpan.licindia.in/UIDSeedingWebApp/getPolicyPANStatus
- Enter all required information, including your Policy Number, Date of Birth, PAN, and the applicable captcha.
- Click the ‘Submit’ button.
- If your PAN is not connected, then proceed as follows:
- Inform LIC of any changes to your personal information. Go to https://licindia.in to see the LIC’s official website.
- To register your PAN online, click on the Online PAN registration button.
- Enter your birth date, gender, email address, PAN number, complete name, cellphone number, and LIC policyholder number.
- After logging into the portal, click the ‘Submit’ button.
Follow the guidelines below to update your LIC policies for your PAN data. To be eligible LIC policyholder must be linked to your PAN before February 28th, 2022.
- Demat account
Buying stocks or IPO can only be carried out through a Demat account, so the following steps will guide you through opening a Demat account if you don’t already have one.
- Access the National Securities Depository Limited (NSDL) site – For registered depository participants, please visit https://nsdl.co.in or Central Depository Services Limited (CDSL) https://cdslindia.com.
- When opening your Demat account, you must give the following documents: a current picture, your PAN card, proof of address, and a canceled cheque.
- The Depository Participant may require additional information.
The Final Word
While the initial public offering (IPO) date is uncertain, participants must have a Demat account and a valid PAN card.
Existing LIC policyholders may be eligible for preferential treatment since the finance minister has recommended that they get 10% of the proceeds from the IPO. If you are already covered, your chances of obtaining an allocation have increased.