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 issue.

Although the finance ministry is yet to finalise the timeline for the LIC IPO, the government may launch the public offering in the January-March quarter. As per the proposed plan, LIC will offer up to 10 percent of the issue size to it policyholders.

Finance Minister Nirmala Sitharaman announced in the Budget this year that LIC would hit the primary market with an IPO in 2021-22, as part of a disinvestment drive to garner Rs 1.75 lakh crore. The government is targeting Rs 1 lakh crore from the sale of stakes in public sector banks and financial institutions. The remaining Rs 75,000 crore is likely to come from divestment of CPSEs.

The Union Cabinet cleared the decks for disinvestment in LIC in July 2021 and authorised a panel led by Sitharaman to decide on the quantum of stake dilution.

"In order to participate in any such public offering, policyholders will need to ensure that their PAN details are updated in the corporation's records. Further subscribing to any public offering in India is only possible if you have a valid demat account," LIC said in an advertisement in all leading newspapers.

The ad also said updating the PAN details was important from the KYC perspective for participation in the proposed IPO.

If policyholders do not have a demat account, they should get one at their own cost, LIC said in the ad.

"You would incur costs towards opening of a demat account and or PAN issuance and maintaining the demat account or other ancillary costs. All such costs would have to be solely borne by you. No costs would be borne by the corporation," it clarified.

(Edited by : Anshul)

First Published:Dec 2, 2021 10:50 AM IST