These are the discounts and perks LIC policyholders will get while applying for the IPO

• LIC IPO is selling about 31.6 crore shares or 5% of the government's stake till the end of March.
• To boost investment from its army of policyholders, LIC has reserved 10% shares from the total issue size for such investors.
• LIC has a market share of 74.6% in terms of a number of individual policies issued in FY21.

The government is all set to sell a small chunk of its shareholding to list the largest life insurer, Life Insurance Corporation of India (LIC).

The initial public offering (IPO) comes with a number of perks for people who own insurance policies of LIC. LIC has about 29 crore policyholders and dominates a market share of 74.6% in terms of a number of individual policies issued in FY21.
LIC has created a reservation quote for policyholders and employees wherein such investors will get a discount on the issue price.

10% reservation for policyholders along with some discount
LIC has reserved 10% of the issue size for its army of policyholders and also plans to give some discount to such investors in the IPO.

Not only policyholders, employees of the insurance company also have a quote for themselves with 5% of issue size reservation.

“Policyholders may get a 10% discount on issue price,” Anshuman Khanna, Director at Value Prolific Consulting Services (ValPro) told Business Insider.

Suppose the issue price of LIC IPO is ₹1,500 then the policyholder may get at ₹1,350 per share, which will give them an additional upside, said Khanna.

Cap on investment
Investors holding LIC policy cannot exceed their investment more than ₹2 lakh as most of such investors also come under the retail category.

Such investors can bid under the ‘Policyholder Reservation Portion’ through the applications supported by blocked amount (ASBA) and the UPI mechanism.

Mandatory to link PAN and have a demat account
Only policyholders who have updated their PAN by February 28, 2022 can apply under policyholder's quota.

Process to link your PAN details with the LIC:

• Visit LIC website www.licindia.in OR https://licindia.in/Home/Online-PAN-Registration
• Keep your policy number ready, PAN, date of birth and e-mail ID, which needs to be filled in while updating your PAN.
• You may update the records for all of your LIC policies using the above link.
• You can also check whether your PAN Is registered in your policy or not by visiting the Corporation's website www.licindia.in OR https://linkpan.licindia.in/UIDSeedingWebApp/getPolicyPANStatus?
• Alternatively, you may also contact your LIC Agent for assistance.

Joint life policy holders
If you own a joint policy of LIC, then only one of the policy members can apply under the ‘Policyholder Reservation Portion’ category.

The PAN number of the applicant bidding in the offer (you or your spouse) needs to be updated while linking the PAN.

Also, the policy member applying for the IPO has to have a demat account in his/ her name and in case the demat account is joint, the applicant needs to be the first /primary holder of the demat account.

Eligible policies
All policies that have not exited LIC’s records by way of maturity, surrender or by way of death of the policyholder are eligible for policyholder reservation.

Applied for LIC policy recently but did not receive policy document
If you have applied for a LIC policy but are yet to receive the policy document, in that case, the draft red herring prospectus (DRHP) states that the policy should have been issued on or before the date when the DRHP was filed on February 13.

No lock-in period
Policyholders who were allotted equity shares under the reservation category can sell the shares anytime as per their choice.

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