LIC IPO guide for policyholders

The first public offering of more than 31.6 million shares which is five percent of the stake held by the government will likely to hit the D-street in March . Employees and policy holders of the insurance giant will receive a reduction over the price of the floor.

India’s largest public offering is set to go on the market. Life Insurance Corporation of India (LIC) submitted an Draft Red Herring Prospectus (DRHP) with the capital regulatory body Securities and Exchange Board of India (Sebi) to facilitate the transfer of a five percent stake to the government. The employees and policy holders of the country’s most renowned insurance company would receive a cut over the cost of the floor.

Prior to applying for the LIC’s IPO applicants must be aware of certain details.


The first public offering of 31.6 million shares which is five percent of the stake of the government is expected to hit D-street by March. Employees and policy holders of the insurance giant will receive a reduction over the cost of the floor.


While the draft documents don’t reveal the market value of LIC according to the norms of the industry, it would be around three times embedded value, or about 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 anticipates to earn up to 63,000 crore (about USD 8 billion) from the IPO according to an PTI report.


It is LIC IPO represents an offer to sell (OFS) from the Government of India and no new issue of shares is planned from Life Insurance Corporation (LIC). The government holds a 100% stake, in LIC, which is more than 632.49 millions shares with LIC.

The value of shares at the time of purchase is Rs 10 per share.


This LIC IPO would be the largest IPO that has ever occurred in the Indian stock market. Once listed, the market value of LIC is comparable to that of top companies such as RIL as well as TCS.

To date, the sum raised by Paytm’s IPO of Paytm in 2021 was the biggest ever, at nearly 18300 crore. It was then Coal India in 2010 at more than Rs 15,500 crore. Then there was Reliance Power in 2008 at 11700 crore.


The draft papers of the government did not reveal the discount that would be offered to policyholders or LIC employees participating in the public offer.

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


Insurance policy holders who intend to invest in the LIC’s IPO must make sure they have their permanent account Numbers (PAN) is connected to Life Insurance Corporation of India.


In addition, policy holders need DEMAT accounts in order to be able to participate in 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 stated in its advertisement for 2021.

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

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