Last Updated on February 14, 2023 by Sagar Kumar Sahu
Are you a policyholder of the Life Insurance Corporation (LIC) of India and looking to participate in their initial public offering (IPO)? With LIC’s proposed IPO, existing policyholders now have an unprecedented opportunity to convert their policies into stocks and benefit from future capital gains.
The Life Insurance Corporation of India (LIC) is set to launch its initial public offering (IPO) and many policyholders are eager to participate. An IPO is a form of financial instrument that enables companies to raise capital and list themselves on the stock exchange. LIC of India’s proposed IPO is set to be its largest ever, providing investors with an opportunity to buy shares in the company.
This blog post will give you a step-by-step guide on how to apply for the LIC IPO as a policyholder.
What Is LIC IPO?
LIC IPO is the Initial Public Offering (IPO) of the Life Insurance Corporation of India (LIC). It is the largest insurance company in India and a major investor in several sectors. The LIC IPO process will run for 4 days which will be open on May 4, 2022, and close on May 9, 2022.
The direct objective of the LIC IPO is to deliver an option for investors to invest in the Life Insurance Corporation of India and become part-owners of the company. The listing of shares on stock exchanges will also allow shareholders to trade their shares in the secondary market.
LIC is a brand itself and everybody must have known about the insurance products. LIC covers many sectors such as life, health, vehicle, and other general insurance products. And now you are getting a big chance to invest in India’s largest insurance company and get long-term return benefits.
And one good part is that the subscription to the IPO is available for both retail and qualified institutional buyers. The allotment of shares by LIC has been done through a combination of price-based and book-building processes.
How Can Policy Holders Apply For The LIC IPO?
If you are a Policy Holders, you can apply for the LIC IPO by following these simple steps:
Step 1: Read the Red Herring Prospectus (RHP) of LIC mindfully – Before applying for the LIC IPO, you need to first read and go through the Red Herring Prospectus properly. The RHP contains all the critical details about the company and its operations. You will also get to know the details on how to apply for the IPO. You can find this document online or in your any local financial institution.
Step 2: Prepare Your Documents – Once you have properly read RHP, you should prepare all of your documents before applying for the LIC IPO. These documents should include your proof of identity and address, your PAN card number, bank account information, and any other important supporting documents that are related to your policy-holding status with LIC.
Step 3: Now submit Your Application Online or offline – So once all of your documents are ready, you can then submit your application either online or offline. To apply online, visit the BSE website and click “Apply Now” under “LIC” in the list of IPOs available. And if you are applying offline, carry all required documents to your nearest LIC branch office or designated collection center and submit them along with a signed copy of your application form.
What factors to be considered before applying for LIC
Risks and Consideration
You should always believe the Risks associated with the IPO of any company. You need to consider many risk factors before deciding whether or not to apply for the LIC initial public offering (IPO). Here are some points and considerations that you should be well aware of:
Market risks: As with any investment, there is a risk that the value of the shares could go down after the IPO. This can be due to many reasons, like prevalent market conditions, leak of any internal truth of the company, and other external market fluctuations. Therefore It is important to stay alert and be aware of these risks so that you can be prepared for unexpected situations of decline in the value of the shares.
Oversubscription: There is also a chance that the IPO could be oversubscribed, which means that there will be more demand for shares than is available. In this case, the allocation of shares will be decided by a lottery or any other similar mechanism. So if this situation arrives then some applicants will not receive any shares.
Long-term prospects: It’s important to evaluate the long-term prospects of the company before going to apply for an IPO. You should first evaluate the company’s financial performance, its market position, and its future growth prospects. It will be helpful to do depth research using the internet like reading blogs, watching videos, and consulting with a financial advisor before making a decision.
Other investments: Before applying for the IPO, you have to calculate your investment planning and whether your decision to buy an IPO hampers your other investment plans and fits into your overall financial strategy. You need to consider the possible risks of the investment in comparison to other investments you have.
before applying for an IPO, you can find it to be a daunting task because you need to do all research work, important studies, and calculations before coming to a final decision. But all these things will be worth it once you get a good return from the investment.
And remember to read through all relevant documents carefully and prepare all necessary documents beforehand, so that you can make sure that your applications go smoothly without rejection.
We hope that this article has helped you. If you have any questions then let us know in the comment section. Thanks for reading.
Can I apply for LIC IPO as a retail and policyholder?
Yes, retail investors and policyholders can both apply for the LIC IPO.
Can I apply for LIC IPO with a policy number?
No, you cannot apply for LIC IPO with only a policy number. You need to have a Demat account and your PAN card to apply for LIC IPO. You will also be asked to provide your other personal and financial information so that you can easily complete the application process.