Ever since the Life Insurance Corporation (LIC) announced launching the initial public offering (IPO), 6.48 crore LIC policyholders have shown interest to get the much-touted share of the largest insurance company in the country, an official said.
“The response to our IPO launch is wonderful. We have some figures: 6.48 crore policy holders have linked their PAN number with the policy details up to the cut-off date (February 28, 2022),” Rahul Jain, director of the Department of Investment and Public Asset Management (DIPAM) in the Ministry of Finance, told reporters.
The LIC has set a price band of Rs 902-Rs 949 per equity share. The government intends to raise Rs 21,000 crore through the issue.
The officer said 10 per cent reservation is given to the policyholders in the IPO, whose shares have been earmarked.
“Whosoever is the policyholder, if they have linked their PAN with the policy details by February 28, they are eligible to participate in the LIC IPO through reservation category,” Jain said.
Explaining, the DIPAM director said anybody who is a policyholder can invest up to Rs two lakh in the reservation category and also Rs two lakh in the retail category. The LIC policyholders would get Rs 60 discount in the IPO, he added.
According to Jain, the 6.48 crore policyholders are eligible to participate in the IPO if they open their DMAT account.
“As of now, through the depositories we could make out that around 1.21 crore DMAT accounts have been opened by the policyholders,” Jain said.
To a query on why the LIC intended to float, Jain said the government wishes to bring corporate governance to the LIC and "to share the good stories."
“The true value of the company is determined in the capital market. So you have to start with the capital market,” Jain said.
The bid opens on May 4 and closes on May 9. Minimum bid lot is 15 shares and in multiples of 15 equity shares thereafter.