Ahead of LIC IPO, SEBI, DFS, DIPAM and PSU Bank heads meet to discuss roadmap

Government has started discussion with stakeholders for making successful and glitch proof initial public offer of Life Insurance Corporation of India (LIC). India’s largest IPO which has more than 27 crore direct customers across the country is expecting applications from interested investors from all parts of the country, especially from tier-2 and tier-3 cities.  

The Department of Financial Services (DFS) and Department of Investment and Public Asset Management (DIPAM) under the Ministry of Finance discussed challenges that could flare-up during the LIC IPO and towards its preparations.  

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The two departments have discussed major issues and preparation with Securities and Exchange Board of India (SEBI) and heads of PSU banks, last week.  

A source close to the development has told Zee Business that “DFS instructed all banks to increase their capacity for taking IPO application in ASBA (Application Supported by Blocked Amount) even in rural areas”.  

LIC has over 27 crore policy holders who will get preference in this IPO. Government is expecting large number of demat account to also open for this IPO.  

“DFS, DIPAM and Sebi clearly given the messages that bank should return block money in stipulated time period which blocks for IPO application,” another source privy to the development has told Zee Business.  

“Regulator has received several complaints normally and from social media that money has not released by banks to investors who have not got shares,” this source said.  

In this meeting, DFS and DIPAM hinted timeline of filing DRHP in January and in March expecting timeline of hitting market.  

As this would be the largest IPO of the country and number of application could be ten times bigger than normal IPO.  

As LIC has more than 27 crores policy holders, employees who will also get preferences and other investor. Usually, around 50 lakhs applications comes in IPO. However, in this IPO number would be very high.  

LIC employee can file IPO in three different category. First in employee category, second in policy holder category (if he has any policy) and lastly in common category of investors.