Holders of Pradhan Mantri Jeevan Jyoti Bima Yojana are also eligible for the benefits of LIC IPO
New Delhi:
Subscribers of Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) are also eligible to take advantage of the quota benefits reserved for the policyholders of the Life Insurance Corporation (LIC), the chairman of the insurance giant MR Kumar said Monday.
According to the draft red herring prospectus recently submitted by LIC to market regulator SEBI, 10 percent of the total offering of LIC shares will be reserved for the LIC policyholders. There is also speculation about discounts. However, the LIC has not yet announced plans to offer policyholders discounts at the proposed initial public offering (IPO).
“I would like to clarify that PMJJBY policyholders are also eligible to apply for our IPO as the scheme is being offered by LIC,” Mr Kumar said in a virtual interaction with media outlets.
The PMJJBY is an insurance scheme launched by the Prime Minister for people between the ages of 18 and 50. Risk cover under this scheme is for Rs 2 lakh in case of death of the insured for any reason. The premium is Rs 330 per annum. The scheme is being offered by the Life Insurance Corporation of India and any other life insurers willing to offer the product on similar terms, with appropriate approvals and for this purpose with banks.
Mr Kumar said the IPO will be in the market during the current fiscal period and the IPO is also expected at the end of March.
“It is currently being valued and at this point we cannot predict how much money LIC will get by diluting its 5 percent stake,” he said.
LIC’s IPO is expected to be approved by regulatory authorities in the first week of March, after which an indicative marketing price band will be established, the LIC chairman said.
Mr. Kumar said that LIC is well capitalized and does not require any new capital injection. “If growth capital is needed in the future, we will approach not only the government but all shareholders,” he said.
