LIC IPO: Everything Retail Investors and LIC Employees Should Know

Damini Bhandary Damini Bhandary
Mar 4, 2022 4 min read
LIC IPO: Everything Retail Investors and LIC Employees Should Know

Human beings not only think about their present but also about their future, so it is significant to do something that will at least give them financial security and help them in growing their wealth. None of us is aware of our future, so instead of sitting quietly and doing nothing, it is better to invest in something that can at least play the role of an umbrella for us during a rainy day.

Life Insurance Corporation of India also known as LIC is the biggest life insurance company in the country. If you live in India, there is no way, you haven’t heard about LIC. This life insurance company has captured 70% of the market share and is under the Government of India. In this, we are going to talk about LIC IPO, what it exactly is and what are the things we need to know before investing in them. So, let’s get right into it.

"It's not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for." β€”Robert Kiyosaki

What Is LIC IPO?
Things You Need to Know Before Investing In LIC IPO
When Will LIC IPO Launch?

What Is LIC IPO?

LIC IPO is LIC’s Initial Public Offering where they are offering shares of LIC as the Government has decided to sell some of its stakes. Recently LIC made headlines after submitting Draft Red Herring Prospectus (DRHP).

The Government of India has decided to sell 5% of its stake, therefore 95% stake of the company will remain under the Government. Among the public offering, 35% will be booked for the retail investors, the other 5% for the employees of LIC and 10% will be reserved for the policyholders.

Things You Need to Know Before Investing In LIC IPO

Investing in something is a very important decision that one has to take; you have been very clear and careful before doing anything related to this as it is about the financial security of your future.

  • As per the information, LIC policyholders who got their policy on or before the 13th of February, 2022 are eligible to invest in the 10% of public offerings that is reserved for the policyholders.
  • If anyone wants to be eligible in the quota for the policyholders, their PAN has to be linked with their policyholders. Those who have already linked their policyholders with their PAN on or before the 28thof February 2022 are eligible for the 10% quota.
  • Policyholders who have their Demat account are eligible for the 10% quota.
  • As 35% are reserved for retail investors, it means anyone who is not a LIC employee or a policyholder can apply to this quota. Policyholders, as well as employees of LIC, can also apply to this quota.
  • A retail investor is allowed to invest max to max INR 2 Lakhs, not more than that in their quota of LIC IPO.
  • LIC policyholders are allowed to invest INR 2 Lakhs under their quota of IPO.
  • LIC Employees are also eligible to invest a maximum of INR 2 Lakhs under their quota of IPO.
  • A policyholder who is not a LIC employee can invest a total of INR 4 Lakhs that is INR 2 Lakhs in the quota of retail category and INR 2 Lakhs in the policyholder category.
  • A LIC employee can invest up to INR 6 Lakhs if they are also a LIC Policyholder. It means INR 2 Lakhs under the quota of retail category, INR 2 Lakhs under the quota of policyholder category and another INR 2 Lakhs under the quota of LIC employee category.
  • If policyholder wants to avoid getting their application rejected under the policyholder quota, then they must ensure that they are primary Demat account holder.
  • If there are joint policyholders then they can apply under the policyholder’s quota, if only they have separate Demat accounts.

IPO Process in India: How is a Company Listed on the Stock Market?
Many companies are planning for an IPO to raise funds. But how does a company lists itself on the stock market? Here’s the complete process.

When Will LIC IPO Launch?

LIC IPO will be open to the public in the month of April 2022. The total offering is 31.6 Crore shares. It is also said that LIC employees and policyholders are eligible to get discounts on the floor price as well.

Conclusion

LIC is one of the biggest insurance companies in India founded in 1956 and is completely owned by the government. It is one of the most awaited IPOs since the launch of Zomato, Nykaa and Paytm IPO. It is expected to be one of the biggest IPO launches. People are eagerly waiting for LIC IPO so that they can invest in it.

FAQs

Who are the shareholders of LIC?

The government of India is the major shareholder and will remain the majority shareholder of LIC, only 10% is being sold to policyholders.

When will LIC IPO launch?

The LIC IPO will be open to the public on March 11, 2022.

How can I buy LIC shares?

If you're a retail investor you can buy LIC shares using your UPI id.

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