LIC IPO: Five things to know before issue hits Dalal Street

The initial public offering (IPO) of Life Insurance Corporation (LIC) of India is the most awaited share sale of this year. A decision on the date of LIC IPO is expected to be taken by the end of this week. The IPO has been deferred time and again due to high volatility and unfavourable stock market conditions which could hamper the proceeds from the share sale.

However, investors are upbeat about the prospects of the IPO, which could fetch them handsome returns.

LIC IPO: Decision on timing of public offer shortly

Here's a look at five things to know before applying for the LIC IPO.

1. One can apply for the shares of LIC as a retail investor or a policyholder. If you are an existing LIC policyholder, you will have to link your PAN card with the policy. LIC had asked all its policyholders to link their PAN cards by February 28 this year to become eligible for participating in its upcoming public issue. LIC has reserved 10 per cent of the issue size for its policyholders. Employees of the firm will also have a quota of 5 per cent of the issue size.

2. All policyholders who have not exited LIC's records by way of surrender, maturity or by way of death are eligible to take part in the share sale.

3. Policyholders who will apply under the 'Policyholder Reservation Portion' can bid through the Applications Supported by Blocked Amount (ASBA) and the UPI route. An eligible policyholder can be allocated allocated a maximum of share worth Rs 2 lakh after discount.

4. If one does not have a LIC policy, then also he/she can participate in the share sale through the retail category.

5. There is no lock-in period and policyholders are free to sell the shares on listing day if they want to do so.

On February 13 this year, the government had filed the draft red herring prospectus (DRHP) with the regulator. The government will have to file fresh papers with SEBI after May 12 in case the IPO does not hit the market by that time. LIC has over 28 crore policyholders and life funds of worth Rs 34.3 lakh crore. According to LIC's DRHP, over 3.16 crore shares are on offer.

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