In the run-up to the initial public offering (IPO), the Life Insurance Corporation (LIC) is asking its policyholders to update their permanent account number (PAN) details and open demat accounts to participate in the public broadcast.
Although the finance ministry has yet to finalize the schedule for LIC’s IPO, the government could launch the public offering in the January-March quarter. In accordance with the proposed plan, LIC will offer up to 10% of the issue size to its policyholders.
Finance Minister Nirmala Sitharaman announced in this year’s budget that LIC will hit the primary market with an IPO in 2021-2022, as part of a divestment drive to raise Rs 1.75 crore lakh. The government is targeting Rs 1 lakh crore from the sale of stakes in public sector banks and financial institutions. The remaining 75,000 crore will likely come from the divestment of CPSEs.
The Union Cabinet authorized the divestment in LIC in July 2021 and authorized a panel led by Sitharaman to decide on the amount of the dilution of the stakes.
“In order to participate in such a public offering, policyholders will need to ensure that their PAN details are updated on company records. Re-underwriting a public offering in India is only possible if you have of a valid demat account, “LIC said in an ad in all major newspapers.
The announcement also said that updating PAN details was important from a KYC perspective for participation in the proposed IPO.
If policyholders don’t have a mat account, they should get one at their own expense, LIC said in the announcement.
“You would incur costs for opening a mat account and / or issuing a PAN and maintaining the mat account or other incidental costs. All of these costs should be your sole responsibility. No costs would be borne by the company, ”he said.