Since Life Insurance Corporation (LIC) announced its initial public offering (IPO), 6.48 million LIC policyholders have expressed interest in acquiring the much-vaunted stake in the country’s largest insurance company, an official said.
“The response to our IPO has been great. We have some numbers: 6.48 million policyholders have linked their PAN number to insurance details as of the reporting date (February 28, 2022),” said Rahul Jain, director of the Department of Investment and Public Asset Management (DIPAM) at the Treasury Department, told reporters.
The LIC has set a price range of ₹902 to ₹949 per share. The government intends to raise 21,000 crore through the issue.
The official said policyholders at the IPO whose shares are earmarked will be given a 10% reservation.
“Whoever the policyholder is, if they have linked their PAN to the policy details by February 28, they are eligible to participate in the LIC-IPO via the reservation category,” Mr. Jain said.
Explaining, the DIPAM director said each policyholder can invest up to £2,000 in the reservation category and also £2,000 in the retail category. LIC policyholders would get a £60 rebate at the IPO, he added.
According to Mr Jain, the 6.48 billion policyholders are eligible to participate in the IPO if they open their DMAT account.
“To date, we have seen through custodians that approximately 1.21 million DMAT accounts have been opened by policyholders,” said Mr. Jain.
When asked why the LIC intends to go public, Mr Jain said the government wants to bring corporate governance to the LIC and “share the good stories”.
“The true value of the company is determined on the capital market. So you have to start with the capital market,” Mr. Jain said.
The offer starts on May 4th and ends on May 9th. The minimum bid is 15 shares and thereafter a multiple of 15 shares.