The much-awaited initial public offering of the country’s largest insurer LIC appears to be just around the corner now, with its draft red herring prospectus (DRHP) filed on February 13, as per reports.
The state-run insurance company will most likely create policyholder and employee quotas, while offering them discounts, according to its DRHP.
Even though the company’s DRHP does not give a clear picture of the offer size, the Centre will sell 31.6 crore equity shares or 5% of its stake in the insurance company.
Details of LIC IPO Issue Size
“The aggregate of reservations for eligible policyholder(s) shall not exceed 10% of the offer size”, notes LIC’s DRHP.
Individual, resident Indian policyholders holding at least one LIC policy, as on the date of DRHP and bid or offer opening date will be eligible to apply under the reserved portion, states a Moneycontrol report.
A policyholder cannot bid for more than Rs 2 lakh, and will have to compulsorily update their PAN details on the insurer’s records, to be eligible for the said quota.
According to a tweet by the Secretary, Department of Investment and Public Asset Management, “The IPO is 100% OFS by GOI and no fresh issue of shares by LIC. For filing valuation about 31.6 cr shares are on offer representing 5% equity.”
With almost 29 crore policyholders, the state-owned insurance company commands a market share of a whopping 61.6% in new business premium collections, as on January 2022.
This is almost 1.6% more than the market share of the entire private sector life insurers, adds the report.
The second largest insurance company in the country, SBI Life Insurance’s market share is 6.7 times lesser than LIC’s share.
Besides, LIC has been organizing various campaigns since the past year, for its policyholders to update their PAN details in the insurer’s records.
The advertisement notes, “This is very important from a KYC perspective as well as your ability to participate in the proposed public offering by the LIC…this will be used to help you participate in the proposed offering.”
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