How to invest into LIC IPO as a Policyholder?Also learn how to update PAN for LIC IPO

December 16, 2021 Trading 3 min read
How to invest into LIC IPO as a Policyholder

This year has been quite a good year for IPOs, perhaps not in the sense of returns for investors. But it sure was a time when a new promising IPO came almost every week. With new-gen startups such as NYKAA and Paytm making a rather lukewarm debut, eyes are now set upon an old horse, LIC, India’s trusted insurance provider. LIC is set to get listed on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). The LIC IPO price and size haven’t been announced. 

LIC, or Life Insurance Corporation, was among the first Indian insurance providers, further explaining the amount of trust it has garnered over the decades. Established in 1956, LIC has constantly drafted policies that come in a budget and provide maximum coverage for the Indian masses. However, in recent years, LIC has gone international with branches in Fiji, Mauritius, Nepal, and Sri Lanka, among others. 

This IPO is interesting because the company has decided to give special treatment to existing LIC profiles. If you hold a LIC policy, then your application will be given a higher preference over those who do not hold the policy. However, even then, it’s stiff competition if we consider the numbers. LIC is among the nation’s largest insurance providers and has a client base of 290 million people as of 2019. 

Given LIC’s reputation, it’s highly likely the IPO will be oversubscribed. It is being estimated this might be the most oversubscribed IPO of all time in the Indian stock market. 

As the IPO opens, you will be able to check the LIC IPO subscription online. 

With the IPO, the old promoters of LIC will have an option to put existing shares up for OFS (offer for sale). Initially, the IPO was planned for 2021. However, given the second COVID-19 wave and an uncertain emotion prevailing in the market, it was rescheduled to later. 

How to Invest in LIC IPO As a Policyholder?

LIC has announced that 10% of its IPO issue, whenever it comes, will be reserved for policyholders. LIC IPO policyholders would see a one-of-a-kind exception being made. So far in the history of Indian IPOs, no other company has gone so far to prioritise its clients. 

This would also have an impact on the LIC IPO price.

However, to make sure you’re not behind the competition, you must link your PAN card with your policy. LIC already does KYC for most new policyholders and links your PAN to the policy. If you’re an old customer, you can go on LIC’s official website and click on “check my PAN linkage status”. 

You would need your PAN card and your policy papers with you. Using both, you can fill in the required information. Once done, your PAN will be linked to your policy, making it easier for the allotters to determine your subscription and shares. LIC IPO for policyholders would be possible only after linkage with your PAN Card. 

The next step would be to open a Demat account. You can’t buy, sell, or invest in IPOs without a holding or DEMAT account. If you don’t have a Demat account, don’t worry. TradeSmart is among India’s most reasonable brokers that allow you to equity-invest with the most profits remaining in your pockets. Go here

Investing in the LIC IPO is easy if you have an account with TradeSmart. 

  1. Just log on to the website or use the TradeSmart App
  2. On the website, click on the hamburger drop-down, and you’ll find the option to apply for IPOs. 
  3. You will find all the upcoming and current IPOs in the IPO section. Keep an eye on this portion to update the IPO price and lot size.
  4. Once the subscription window has commenced, you can go here and make your application instantaneously. 
  5. The bank account linked with your Demat account will receive a mandate request. Accepting it allows the IPO controlling firm to freeze the corresponding funds in your account. 
  6. The funds will be debited only if you get the allotment. You would get LIC shares in your Demat account in return for the debit. You would then be able to purchase from the secondary market or sell them after listing day. Getting shares in the primary market, i.e., via IPOs, is deemed profitable if the listing price is higher than the allotment price. 

  • Rajeev says:

    This will increase retail participation in the market. As more and more will be opening their Demat accounts just to get a piece of LIC.

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