Are PMJJBY holders eligible for LIC IPO at a discount?

The biggest share market news is Pradhan Mantra Jeevan Jyoti Bima Yojana (PMJJBY) subscribers are eligible for Life Insurance Corporation (LIC) initial public offering at a discount, Chairman of the insurance giant M.R. Kumar announced on February 21. “PMJJBY is a part of it, and the reserve (for policyholders) would be there,” Kumar said in a press conference.

Launch in 2015, PMJJBY offer renewable one-year being assurance of Rs 2 lakh to all reserves bank version holders in the age category of 18-50 years, cover death due to any situation, for a quality of Rs 330 per annum per subscriber. This government scheme is sponsored or administered through LIC.

As each the chart red herring list (DRHP) issued final week, the highest bid amount below the policyholder condition component by an eligible policyholder will not exceed Rs 2,00,000 (net of policyholder discount) (net of policyholder discount).

It further added policyholders possessing one or more policies of LIC as on the date of DRHP and bid/offer opening date, and who are residents of India, would be eligible to apply in this offer under the policyholder reserve part.

The reservation sum for qualified policyholders shall not exceed 10 per cent of the overall offer size. The percentage of the offer available for allocation to qualified policyholders on a proportionate basis is subject to acquiring appropriate permissions from the government.

LIC issued over 21 million individual policies in FY 2021, accounting for nearly 75 per cent of new separate policy issuances. There is no fresh offering of shares by LIC. The government holds 100 per cent shareholding or approximately 632.49 crore shares in LIC. Shares face value will be 10 Rs. . The LIC public issuance would be the biggest IPO in the history of the Indian stock market.

Once listed, LIC’s market worth would be similar to leading firms like RIL and TCS. The LIC IPO is likely by March, and the proceeds will be necessary to meet the revised disinvestment objective of Rs 78,000 crore in the current fiscal year.

LIC’s divide assets was boosted from Rs 100 crore to Rs 6,325 crore through September previous year to help enable the IPO. Last month, LIC declared a profit after tax of Rs 1,437 crore for the first half of 2021-22 as compared with Rs 6.14 crore in the year-ago quarter.