May 22, 2022

The first public offering of 31.6 million shares, which is five percent of stake held by the government is expected to go live in March. Employees and policy owners of the insurance giant would be able to get a cut over the price of the floor.

India’s biggest public offering is slated to launch as Life Insurance Corporation of India (LIC) submitted the Draft Red Herring Prospectus (DRHP) with the capital regulator Securities and Exchange Board of India (Sebi) to facilitate the transfer of a five percent stake to the government. The employees and policy holders of the nation’s biggest insurer will receive a reduction over the cost of the floor.


Prior to applying for the LIC’s IPO the policyholders should be aware of certain details.


The first public offering of 31.6 crore shares , which is five percent of government’s stake will go live in March. Employees and policy holders of the insurance giant will be able to enjoy a discounted rate over the price of the floor.


While the draft documents do not provide the market value of LIC according to the industry norms, it will be three times embedded value, which is around 16 lakh crore.

“The DRHP of LIC IPO has been filed today with the SEBI. For filing valuation about 31.6 crore shares are on offer representing 5 per cent equity,” Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey tweeted.

According to sources from the Merchant Banking sector, the government anticipates to collect up to 63,000 crore (about USD 8 billion) from the IPO as per PTI. PTI report.


It is LIC IPO is an offer for sale (OFS) by the Government of India and no new issue of shares is planned from Life Insurance Corporation (LIC). The government holds a 100 percent of the shares and over 632.49 millions shares with LIC.

Shares are worth Rs . 10 per piece.


The LIC IPO is expected to be the largest IPO that has ever occurred in the Indian stock market. Once listed, the market value of LIC is comparable to that of top companies such as RIL or TCS.

As of now, the sum raised through Paytm’s IPO of Paytm in 2021 was the biggest ever with a record of the sum of Rs 18,300 crore. This was then Coal India in 2010 at more than Rs 15,500 crore. Then there was Reliance Power in 2008 at around Rs 11,700 crore.


The government’s draft documents did not mention the discount to be provided to policyholders and LIC employees who participate in the public offer.

But, as per rules according to the rules, up to 5 percent of the size of an issue can be reserved exclusively for employees and up to 10% for policy holders.


Insurance policyholders planning to invest in the LIC’s IPO must make sure they have their permanent account Numbers (PAN) is in good standing to Life Insurance Corporation of India.


Other than that, policyholders need DEMAT accounts in order for the LIC IPO.

“In order to participate in any such public offering, policyholders will need to ensure that their PAN details are updated in the Corporation’s records,” LIC had stated in its advertisement for 2021.

“Further subscribing to any public offering in India is only possible if you have a valid DEMAT account,” LIC stated in the advertisement.

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