LIC IPO: Policyholders Need to Keep These Two Things Ready to Apply

Life Insurance Corporation of India (LIC) is launching its Initial Public Offering (IPO), one of the biggest IPO in the history of India, by next month. LIC has already filed its Draft Red Herring Prospectus (DRHP) and is awaiting market regulator SEBI’s approval.

Details on LIC IPO

LIC has tweaked its IPO size and trimmed it to a 3.5% stake from a 5% stake, targeting to raise around Rs.21,000 crore. It has set Rs.902 to Rs.942  price band. The floor price is 90.2 times the face value of the equity shares, and the cap price is 94.9 times the face value of the equity shares.

LIC offers a discount of Rs.60 on the issue price to eligible policyholders bidding in the reserved category and Rs.45 discount on the issue price to retail individual investors and employees. Investors can apply bids for a minimum of 15 equity shares and multiples of 15 equity shares. The LIC IPO will be open for public subscription from 4 May to 9 May.

Two Things Required to Apply for Policyholders

Policyholders who are residents of India and have one or more LIC policies would be eligible to apply for the IPO under the ‘Policyholder Reservation Portion’. However, the LIC directs that the policyholders need to have two essential points in check to apply for the IPO. 

Firstly, policyholders must ensure that they have linked their PAN with the LIC policy. Secondly, they need to have a Demat account matching their PAN card.

Process to Link PAN With LIC Policies

Following is the process of linking the PAN card with LIC policies:

  • Visit the LIC website and click on the ‘Proceed’ button.
  • Add details on the ‘Link PAN With Your Policy’ form, tick the declaration, enter the captcha and click on the ‘Get OTP’ button. 
  • LIC will send an OTP to the registered mobile number. Enter the OTP and click on the ‘Submit’ button.
  • After submitting the form, a message is displayed about the success of the registration request.

After the LIC policy of a policyholder is linked with their PAN, they can apply for the IPO under the ‘Policyholder Reservation Portion’.

LIC IPO Application Process

One of the easiest ways to apply for LIC IPO by a policyholder, employee or investor would be through any supported UPI App. Currently, the National Payments Corporation of India (NCPI) approved UPI Apps live on IPO is BHIM in partnership with various banks. Paytm, Freecharge, PhonePe, Google Pay, and MobiKwik also allow IPO investment using UPI.

Investors can also apply for the LIC IPO through internet banking. The process is as follows:

  • Log in to the online netbanking account. 
  • Go to the ‘Investment’ section and click on the ‘IPO/e-IPO’ option on the homepage.
  • Fill in the depository details and bank account details.
  • After filling in the details, the verification process will be completed.
  • After the verification process is complete, click on the ‘Invest in IPO’ option to select the IPO for which you want to apply.
  • Click on ‘LIC IPO’, and add the number of shares and the bid price.
  • Go through the terms and conditions document before placing the bids in the LIC IPO.
  • After reading the terms and conditions document, confirm and place the order by clicking on the ‘Apply Now’ option.

Investors can check the allotment of shares details from the stock exchange website

For any clarifications/feedback on the topic, please contact the writer at mayashree.acharya@cleartax.in.

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