LIC IPO: Policyholders Likely To Get Shares At Discount

Life Insurance Corporation (LIC) policyholders may possibly get a discount to purchase shares in the insurance behemoth’s upcoming initial public offering (IPO), Hindustan Times reports.

As the central government is intending to boost the involvement of the common people in this listing, the small investors will reportedly be allowed to get a discount in the offered shares.

“We have made provisions under the LIC Act that up to 10% of the issue can be offered to policyholders at some discount on the competitive basis,” Department of Investment and Public Asset Management (DIPAM) secretary Tuhin Kanta Pandey told the aforementioned publication.

He further assured, “There will be reservation for employees also.”

However, the government will be revealing the percentage of shares that will be put on sale in the IPO only in the draft red herring prospectus (DRHP) that it is likely to submit to the Securities and Exchange Board of India (SEBI) in this week.

Yet, a minimum 5 per cent of dilution is reportedly certain as the central government will be chasing to meet its revised disinvestment target of Rs 78,000 crore in FY 2021-22.