Mumbai: Around 6.48 crore policyholders of state-run insurance behemoth Life Insurance Corporation of India (LIC) have updated their PAN to participate in its upcoming Rs 21,000-crore mega IPO that opens for subscription on May 4 and closes on May 9.
The company has decided to reserve 10 per cent of shares on the offer for its policyholders under the policyholder reservation portion.
The policyholders will get a discount of Rs 60 per share, while employees and retail investors will be entitled to a lower discount of Rs 45.
Speaking to Financial Chronicle, M.R. Kumar the chairman of LIC, said, “Around 6.48 crore policyholders have updated their PAN but we don’t know if they all have a demat account.”
The last date for linking policy with PAN was February 28.
With the LIC IPO coming up, there has been a spurt in opening of demat account recently. CDSL, which maintains demat accounts, said the number of demat accounts in India has crossed five crore on November 26 and 6.3 crore as on March 31. Similarly, NSDL has 2.67 crore demat accounts now compared to 2.45 crore accounts in November 2022. In total roughly more than 1.5 crore demat accounts have been opened since November, an addition 1.5 crore or 17 per cent demat accounts in total of the 8.96 crore demat accounts as on March 31, 2022.
A demat account is mandatory to participate in IPOs. A policyholder who wishes to apply for LIC’s IPO should be the first account holder in the demat account. In case it is a joint account, then the policyholder should be the first or primary holder.
“Policyholders have also made this company. We now invite them to be shareholders. We want to invite millions of Indians to participate in this process, as LIC unlocks its value,” said Tuhin Kanta Pandey, the secretary of the Department of Invest-ment and Public Asset Management (DIPAM).
B. Gopkumar, MD & CEO, Axis Securities said, “There is a fair degree of interest for the LIC IPO among the retail invest-ors. We opened around 45,000 accounts for the IPO alone last month. Of these, 40 per cent of customers are new to the market. While near-term market volatility is likely to weigh on the stock performance, we remain positive from the long-term perspective. Given the under penetration of insurance and improving financialisation of savings, we expect LIC to maintain its market leadership position backed by robust business traction.”