LIC IPO | PM life cover policyholders not eligible for shares | Start Learning

LIC IPO | PM life cover policyholders not eligible for shares at discounted prices

"It is a group insurance product and (PMJJBY policyholders) isn't eligible," the state-run insurer said in a statement.

IPO-bound insurance giant LIC on February 22 clarified that subscribers of Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) are not eligible for shares at a discounted price in the upcoming initial public offering.

"It is a group insurance product and (PMJJBY policyholders) isn't eligible," the state-run company said in a statement.

The clarification came a day after LIC Chairman M R Kumar said PMJJBY subscribers are also eligible for the benefits available for policyholders. However, LIC said in the statement that it was "inadvertently mentioned".

As per the draft red herring prospectus (DRHP) filed last week, the maximum bid amount under the Policyholder Reservation Portion by an eligible policyholder would not exceed Rs 2,00,000 (net of policyholder discount).

LIC's share capital was raised from Rs 100 crore to Rs 6,325 crore during September last year to help facilitate the IPO.

Notably, the DRHP, filed on February 13 with the market regulator SEBI, said the offer is for the sale of a five percent stake by the government for an estimated Rs 63,000 crore.

Briefing reporters in Mumbai earlier today, Finance Minister Nirmala Sitharaman said there is a lot of interest and buzz in the market for the upcoming IPO of Life Insurance Corporation of India.

"Now that DRHP (for LIC IPO) is out, there is a buzz and a lot of interest in the market. I am glad the way in which it is crafted where shareholders also have a role to play. The way it has been crafted has created a lot of interest and we will be going ahead with it," Sitharaman said.

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