The Initial Public Offering (IPO) from the Life Insurance Corporation of India (LIC) has been one of the most keenly awaited financial events in 2022. Likely to open on 4 May 2022, the LIC IPO is easily going to be the biggest IPO India has ever seen and likely to be one of the largest in the global insurance industry.
As with all IPOs, the LIC IPO will have the usual investor categories such as retail individual, non-institutional investor, qualified institutional bidder, and anchor investor. However, it will also have another interesting category – policyholders. Yes, anyone who holds a LIC policy or scheme will be entitled to apply for LIC share allotment under a separate category.
The numbers behind LIC’s IPO
Since LIC has two-thirds of the Indian market share, it is very likely that you will have a LIC policy. If so, you should definitely find out how you can invest in LIC in 2022. If a preference in share allotment is not attractive enough, let us also look at the sheer size of LIC and its IPO for good measure.
With over 3000 offices across the country and nearly 30 crore policies, LIC is expected to be valued at around Rs 8-10 trillion. Even a sale of 5% of its value is enough to make it the largest IPO in India. The insurance major holds assets to the tune of $511 billion and has over 100,000 employees and 1.2 million agents. It has time and again bailed out struggling state-owned businesses.
Over the past year, investors have shown a keen interest in IPOs. More than $10 billion was raised through IPOs in India till October 2021. More interest is expected to be generated when a pan-Indian brand like LIC goes public.
LIC issue details
Here is a brief look at all the details of the LIC IPO
- Issue opens = 4 May 2022
- Issue closes = 9 May 2022
- Issue price = ₹902 to ₹949 per equity share
- Bid lot = 15 equity shares and a multiple of 15 equity shares thereafter
- Allotment date = Tentatively Friday, 13 May 2022
- IPO size = ₹20,557.23 crore
- Listing Exchanges = BSE, NSE
- Ratios = QIB 50% - Retail 35% - NIB 15%
How LIC policyholders can apply?
The government has earmarked 10% of the issue size to LIC policyholders. If you are one, you can apply under the policyholder category as well as the retail investor category. Later, you can pick one allotment out of the two applications. There will be an individual investment limit of Rs 2 lakh under the policyholder category. There are expectations of even a discount on the base price under this category.
Getting an allotment under your IPO application is not a given. In most oversubscribed IPOs, applicants either see their applications rejected or allotments made on a pro-rata basis only. With a separate investor category, the chances of getting an allotment increases for LIC customers.
Let us see in detail how an existing LIC policyholder can apply for the LIC IPO.
LIC policy, PAN, and KYC updates
Firstly, you have to go here.
- Fill in the necessary details. This includes your policy number, date of birth, PAN, gender, email address, mobile number, etc.
- Tick the box containing the declaration and acceptance of the PAN linking.
- An OTP will be generated upon clicking the ‘Get OTP’ button. Once you enter the OTP and submit it, your LIC policy account will get linked.
If your KYC information has not been updated against your LIC policies, you can do so by going here.
- Click on eServices and select the ‘KYC update’ option.
- Upload the latest KYC documents and await verification by LIC. Once verified, your LIC policy will be updated with the latest KYC information.
Not sure if your PAN is already linked with your LIC policies? You can check the same by going here.
- Head over to the PAN linking status section on the website.
- Enter your policy number along with the information required (date of birth and PAN).
- Enter the captcha code and hit the submit button. Your linking status will be displayed on the screen.
You can also take the support of your LIC agent to get this done.
Getting a Demat Account
You will need a Demat Account if you wish to apply for the IPO. You can open a Demat Account with a depository participant (DP). A list of registered DPs is available online on the NSDL and CDSL websites. To open a Demat Account, you will have to provide your PAN, address proof, cancelled cheque, photograph, and fees as applicable.
An HDFC Bank DigiDemat Account can be easily opened through online verification, KYC submission, and e-signing. There is no account opening charge or paperwork involved. Investors can apply for the IPO and trade at minimal brokerage charges. By linking your HDFC Bank DigiDemat Account to your HDFC Bank Account, you get a seamless investment experience in the stock market, as well as currency and commodity trading. Click here to get started in opening your Demat Account now!
The IPO application process
You will need to visit your profile created on the DP’s platform. The exact navigation for applying to the LIC IPO may vary from platform to platform. But typically, you will be looking for the IPO listing on the platform. While there, select LIC IPO and look for the Policyholder category. Simply enter your details and make a bid. Once you submit your bid, you will receive a mandate from the sponsor bank. Your application process will be complete once you accept the mandate.
Last words
LIC’s IPO launch is expected to be an important event in the country’s financial calendar this year. Those who wish to invest in LIC shares should closely watch the various updates as they come out in the days leading to the offering of the IPO. LIC customers, on their part, should get their policy, PAN, and KYC updated and have their HDFC DigiDemat Account in place.
The LIC IPO has attracted keen interest from both investors and LIC customers, and with good reason. We hope that with this information, you will be adequately prepared to apply for the LIC IPO when the big day arrives.
*Terms and conditions apply. This is an information communication from HDFC Bank and should not be considered as a suggestion for investment. Investments in securities market are subject to market risks, read all the related documents carefully before investing.
Sources:
https://www.bloombergquint.com/markets/lic-ipo-details-all-you-need-to-know
https://www.bseindia.com/publicissue.html
https://allinone.hdfcsec.com/lp/open-trading-account7
https://www.thehindubusinessline.com/money-and-banking/guide-for-the-policyholders-for-the-upcoming-lic-ipo/article37880867.ece
https://www.livemint.com/market/ipo/how-big-is-lic-the-stunning-scale-of-india-s-biggest-ipo-ever-11633057306415.html
