Life Insurance coverage Company (LIC) chairman, MR Kumar has knowledgeable that the subscribers of Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) are eligible for LIC preliminary public providing at a reduction. “PMJJBY is a part of that and reservation will likely be there (for the policyholders),” Kumar mentioned in an interplay with the media.
As per the draft purple herring prospectus submitted by LIC with the markets regulator SEBI not too long ago, 10 per cent of the overall LIC share provide will likely be stored reserved for the LIC policyholders. There are additionally speculations about reductions. Nevertheless, the LIC has not but introduced any plan for providing reductions to the policyholders within the proposed preliminary public provide (IPO).
LIC IPO: What’s PMJJBY?
The PMJJBY is an insurance coverage scheme launched by the prime minister for folks within the age group of 18 to 50 years. Launched in 2015, PMJJBY gives a renewable one yr life cowl of Rs 2 lakh to all financial savings checking account holders, protecting dying on account of any purpose, for a premium of Rs 330 each year per subscriber. This authorities scheme is obtainable or administered by LIC. As per the Draft Crimson Herring Prospectus (DRHP) filed final week, the utmost bid quantity underneath the Policyholder Reservation Portion by an eligible policyholder wouldn’t exceed Rs 2,00,000 (web of policyholder low cost).
LIC IPO: The way to Apply?
LIC policyholders having a number of insurance policies as on the date of the DRHP and bid/provide opening date and are residents of India can be eligible to use underneath the ‘policyholder reservation portion’ class. They must be sure that PAN particulars are up to date within the coverage information of the corporate by February 28. A policyholder can apply solely from his personal demat account. Actually, NRI policyholders or different policyholders residing exterior India can’t apply for this provide on this class.
LIC IPO: IDBI Stake
The state-run life insurer could not promote its total stake in IDBI Bank and might use its giant community of branches to market its insurance coverage companies, Kumar additional mentioned. Its majority stake in IDBI Financial institution, which it rescued in 2019, is seen as a threat to its steadiness sheet.
“I wish to have some stake in IDBI Financial institution. It has been the strongest contributor to the bancassurance channel for us. This may assist us to develop that a part of the channel,” mentioned Kumar in a press convention with reporters on Monday.
India’s authorities and LIC maintain over 90 per cent stake in IDBI Financial institution, which had property of over 2,900 billion rupees ($38.91 billion) on the finish of December and over 1,800 branches throughout the nation. LIC took over the lender when it was weighed down by dangerous loans and wanted a brand new infusion of capital.
LIC issued roughly 21 million particular person insurance policies in FY 2021, accounting for practically 75 per cent of recent particular person coverage issuances. The IPO is provide on the market (OFS) by Authorities of India. There is no such thing as a contemporary challenge of shares by LIC.
The federal government holds 100 per cent stake or over 632.49 crore shares in LIC. The face worth of shares is Rs 10 apiece. The LIC public challenge can be the largest IPO within the historical past of the Indian inventory market.