LIC IPO: Everyone seems to be wanting a piece of the insurance behemoth, Life Insurance Corporation (LIC) of India, through the ongoing subscription process of its initial public listing (IPO). The IPO of the country’s largest life insurance company LIC has subscribed 1.66 times, garnering bids for 26.83 crore equity shares against IPO size of 16.2 crore shares, on May 7, the fourth day of bidding. The portion set aside for retail investors has been subscribed 1.46 times, employees 3.54 times and policyholders 4.67 times, while qualified institutional buyers bid 67 per cent shares of allotted quota and non-institutional investors 108 per cent. The Government of India is selling 3.5 per cent or 22.13 crore equity shares through an offer for sale of Life Insurance Corporation of India. More than Rs 5,600 crore has already been raised from the anchor book on May 2.
The LIC IPO opened for subscription on May 4 and will close on May 9. The issue will be open for retail investors for bidding on Saturday, May 7, as well as on Sunday, May 8. The company’s shares will be listed on both the NSE and the BSE, likely on May 17. The IPO price band has been fixed at ₹902–949 per share. The offer closes on 9 May and investors can bid on 7 May, a Saturday, too. The bid lot size is 15 equity shares and in multiples thereof.
Who can Bid for LIC IPO?
Anyone who has a demat account and a PAN can bid for the LIC IPO. The company has allotted as much as 35 per cent of the total shares for the retail category, under which policyholders get 10 per cent, general retail investors get 24.3 per cent and employees get 0.7 per cent of the shares.
While employees and retail investors get a discount of Rs 45 each, LIC policyholders are eligible to get a discount of Rs 60 per equity share. It must also be noted that to qualify for the LIC policyholder category, one has to link their PAN to LIC policy as of February 28 this year.
Are You An LIC Policyholder Who Doesn’t have PAN Linked to Policy?
Yes, policyholders who have not fulfilled the above-mentioned requirements can still apply. However, you will not be eligible under the portion reserved for policyholders. You’ll have to apply through the retail investors’ quota.
LIC IPO: What is the Maximum Amount Policyholders Can Bid For?
Investors can bid for a minimum of 15 shares and in multiples of 15 thereafter, to subscribe to the LIC IPO. This means that you can bid for 15, 30, 45, 60 shares and so on. However, the LIC has set a maximum amount of Rs 2 lakh for retail investors, policyholders and employees.
A policyholder will be able to bid for only 14 lots. Here is the calculation: Rs 889 (which is Rs 949 minus discount of Rs 60) multiplied by 15 (minimum number of shares) adds up to Rs 13,335 (for one lot). Thus, when we multiply Rs 13,335 by 14, it brings us to Rs 1,86,690. After adding another lot, the amount becomes Rs 2,25,000 which is above the limit.
Can an Investor Use Multiple Trading Accounts?
No. An investor cannot apply for LIC IPO using multiple trading accounts if the maximum limit is already reached. It will be rendered invalid. However, a retail investor can bid for up to Rs 6 lakh in the LIC IPO if he or she qualifies as a policyholder, employee and a general retail buyer.
Can a policyholder apply more than 1 one application in LIC IPO?
Yash Gupta- Equity Research Analyst, Angel One Ltd, explained that “Policyholders who have linked their pan number with the LIC policy will be eligible for the policyholder discount. If an investor has more than one LIC policy, they also can apply for one application in the policyholder category. A retail investor who is also a policyholder can apply for two IPO applications, one in the policyholder category and another one in the retail category so that retail investors will be eligible for policyholder discount and retail investor discount.”
Can You Bid For The LIC IPO Under Multiple Quotas?
While most people may be able to apply for the LIC IPO only under one of the categories, if you happen to be connected with LIC—as an employee or policyholder or both—you can be an applicant under three separate categories, if you want. That is, you can place a bid under the portions reserved for employees, policyholders and retail or non-institutional investors (one of the two). Note that, if you make an application both under the retail and non-institutional portion, they will be considered as multiple bids and both will get rejected.