Subscribers of Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) are eligible for LIC initial public offering at a discount, Chairman of insurance company M R Kumar said on Monday.
Launched in 2015, PMJJBY offers a renewable one-year life cover of Rs 2 lakh to all savings bank account holders in the age group of 18-50 years.
Subscribers of Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) are eligible for LIC initial public offering at a discount, Chairman of insurance company M R Kumar said on Monday.
"PMJJBY is part of that and reservation will be there (for the policyholders)," Kumar said in an interaction with the media.
Launched in 2015, PMJJBY offers a renewable one-year life cover of Rs 2 lakh to all savings bank account holders in the age group of 18-50 years, covering death due to any reason, for a premium of Rs 330 per annum per subscriber.
This government scheme is offered or administered through LIC. As per the Draft Red Herring Prospectus (DRHP) filed last week, the maximum bid amount under the Policyholder Reservation Portion by an eligible policyholder would not exceed Rs 2,00,000 (net of policyholder discount).
It further said policyholders having one or more policies of LIC as on the date of DRHP and bid/offer opening date and who are residents of India would be eligible to apply for this offer, under the Policyholder Reservation Portion.
The aggregate of reservations for eligible policyholders shall not exceed 10 per cent of the total offer size. The portion of the offer available for allocation to eligible policyholders on a proportionate basis is subject to the receipt of necessary approvals from the government.
LIC issued approximately 21 million individual policies in FY 2021, accounting for nearly 75 per cent of new individual policy issuances. The IPO is offer for sale (OFS) by the Government of India. There is no fresh issue of shares by LIC.
The government holds a 100 per cent stake or over 632.49 crore shares in LIC. The face value of shares is Rs 10 apiece. The LIC public issue would be the biggest IPO in the history of the Indian stock market.
Once listed, LIC's market valuation would be comparable to top companies like RIL and TCS. The IPO of LIC is expected by March and the proceeds would be crucial to meet the revised disinvestment target of Rs 78,000 crore in the current fiscal year.
LIC's share capital was raised from Rs 100 crore to Rs 6,325 crore during September last year to help facilitate the IPO. Last month, LIC reported a profit after tax of Rs 1,437 crore for the first half of the financial year 2021-22 as compared with Rs 6.14 crore in the year-ago period.