LIC IPO: Big updates for policyholders with joint accounts, lapsed policies

Employees and policyholders of the country's largest insurer would get a discount over the floor price.

The initial public offering (IPO) of LIC is all set to be the biggest IPO in the history of the Indian stock market. Several traders and investors are eager to participate in the mega IPO as, once listed, LIC's market valuation would be comparable to top companies like Reliance Industries Limited (RIL) and Tata Consultancy Services (TCS).

Employees and policyholders of the country's largest insurer would get a discount over the floor price.

The government did not disclose in the DRHP the discount which would be given to policyholders or LIC employees in the public offering. As per norms, up to 5 per cent of issue size can be reserved for employees and up to 10 per cent for policyholders.

Now the question is whether policyholders with joint accounts or lapsed policies can participate in LIC's IPO or not.

LIC policyholders with joint accounts can participate in the upcoming IPO. However, only one of the two policyholders will be allowed to apply for shares under the Policyholder Reservation Portion.

According to the LIC's Draft Red Herring Prospectus (DRHP), the Permanent Account Number (PAN) of the applicant bidding in the offer must be updated in the policy records.

The applicant needs to have a demat account in his or her name and in case the demat account is joint, the applicant needs to be the first or primary holder of the demat account, the draft papers of LIC's IPO stated.