LIC IPO: How Can Policyholders Apply To Get Eligible Discount?

LIC IPO on its first day of subscription received a good response. Despite the stock market falling after the Reserve Bank of India (RBI) hiked interest rates, the mega initial public offering (IPO) of Life Insurance Corporation (LIC) had a strong reaction from investors, with 67 per cent of the shares sold out on the first day of bidding on Wednesday.

LIC IPO

The Central Government Of India will offload a 3.5 per cent stake in the LIC. The entire offer is an offer for sale (OFS). The IPO is expected to garner Rs 21,000 crore at the upper end of the price band. The price range for the LIC IPO is Rs 902 to Rs 949 per equity share.

 
The LIC IPO subscription was led by the LIC policyholders, with their reserved quota being subscribed 1.99 times. Employees' part was 117 per cent subscribed. According to stock market data, the retail investors component was 60 per cent subscribed.

Policyholders Quota

The policyholders reserved quota created by the government of India specially for policyholders of the LIC mega IPO. Under this quota, the policyholders can receive a discount against the issue price range through the LIC IPO.

Employees and retail investors get a discount of Rs 45 each, Policyholders, on the other hand, would receive a discount of Rs 60 per equity share. As a result, at the top end of the pricing range, LIC policyholders may participate in the LIC IPO for only Rs 889 per share. 

Who are eligible?

To be eligible for a bid under the Policyholder category, the individual policyholders need to fulfil certain conditions according to LOC's Draft Red Herring Prospectus (DHRP) submitted with capital market regulator SEBI

• To apply for the IPO, all policyholders must first create a Demat account. 
• According to the company's regulatory filing, LIC policyholders whose PAN is linked to the insurance policy as of February 28, 2022, will be able to register for the LIC IPO under the policyholder quota for a discount.
• Apart from that, under the Policyholder Quota, any policies that have not exited LIC records owing to maturity, surrender, or the policyholder's death are eligible for a 60% discount.

How To Apply Under Policyholders Quota?

Policyholders can apply for the LIC IPO under the policyholders' quota, one can use online banking applications or depository platforms such as Groww, Zerodha, Paytm Money, and Upstox. To apply for the IPO, the policyholder needs to select the LIC Policyholder category in the respective depository platform and enter a bid price, and the number of shares. Once it's done, read the terms and conditions, click on the Apply/Submit button, and make payment by using UPI or any other payment option.