Policyholders of the Life Insurance Corporation of India may be offered at discount at the state-run insurance provider’s upcoming initial public offering (IPO). LIC isn’t just India’s biggest insurance company but also among the biggest in the world, with millions of people having invested in its policy offerings.
As part of its divestment push, the Indian government will is eyes a highly successful IPO for LIC. The government will be filing the offer document, called the draft red herring prospectus (DRHP) for LIC IPO this week, as per Tuhin Kanta Pandey, Secretary, Department of Investment and Publish Asset Management (DIPAM). Pandey said that there is certain reservation under the ‘retail window’ and the IPL will also have a “policyholders’ window.”
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“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. There will be reservation for employees also,” the DIPAM Secretary revealed.
This indicates that the LIC IPO may come with a discount not just for policyholders but also employees and retail investors, it has been reported.
The DIPAM secretary reportedly only confirmed the chances that a discount is offered to policyholders but not the other categories. Such discounts will aim to encourage interest from small investors. As per Pandey, the percentage of government stake that will be diluted via the IPO will be a “minimum 5%.” is certainly expected,” he said. Latest reports quoting advisors suggest the size of the issue could be between 5% and 10%.
