The Life Insurance Corporation of India (LIC) is likely to create policyholder and employee quotas and offer them discount, as per its much-awaited draft red herring prospectus (DRHP) filed on February 13.
The DRHP does not specify the offer size, but the central government will offload 31.6 crore shares, or 5 percent of its stake in the company.
The portion planned to be reserved for policyholders can go up to maximum of 10 percent. “The aggregate of reservations for eligible policyholder(s) shall not exceed 10% of the offer size,” the DRHP stated. Employee quota will be capped at 5 percent. The quantum of potential discount will be specified closer to the bid opening date, at least two working days prior.
The IPO is 100% OFS by GOI and no fresh issue of shares by LIC
For filing valuation about 31.6 cr shares are on offer representing 5% equity. pic.twitter.com/UizbeiPloD— Secretary, DIPAM (@SecyDIPAM) February 13, 2022
LIC has nearly 29 crore policyholders and commands a market share of 61.6 percent in new business premium collections as on January 2022. The policyholders’ quota in the IPO – a first-of-its-kind – was created after the central government permitted LIC to designate policyholders as one of the reserved categories, as per an amendment made last year to the LIC Act, 1956.
The insurance behemoth has, since last year, been running campaigns to get policyholders to update their PAN details in its records. “This is very important from a KYC perspective as well as your ability to participate in the proposed public offering by the LIC…this will be used to help you participate in the proposed offering,” the ad said. It also outlined the process for updating PAN details online through LIC India‘s portal. Policyholders will have to enter their PAN, policy number, date of birth and email ID. Those not conversant with the online mode can complete the process through their agents. It had also made it clear that having demat accounts is a pre-requisite for participating in the public offer.say analysts.