LIC IPO 2022: Policyholders must know these important FAQs about the upcoming IPO - See details you need to know

LIC IPO 2022 Latest News: Life Insurance Corporation (LIC), the country's largest initial public offering (IPO) will be launched soon. The company has filed DRHP with SEBI on February 13, 2022. The issue will be opened for the public in March. 

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It is reported that 10 per cent of the shares will be reserved for LIC policy holders. Now, in this regard, there are certain questions in the minds of the policyholders which need to resolved. Here are some important FAQs regarding the LIC IPO which the policyholders must be aware of: 

Will there be any tax exemption if there is share allotment on investment in LIC IPO?

No, there is no such provision. Even though investing in LIC policy gives tax exemption. But, there is no tax exemption on investment in equities. Rather, the profits earned from investments will be taxed here.

Will any lock-in period be imposed on the portion reserved for the policy holders?

No, there is never any lock-in period for retail investors. You can sell the shares at any time after your listing on getting the shares.

Will both the policy holders be able to bid for IPO in a joint life insurance policy?

Only one of the two policyholders can bid in an IPO. The PAN number of the policy holder should be updated in the records. 

Will policyholders be able to bid in IPO despite LIC's lapsed policy?

All policy holders can bid in the IPO. Those policies which are not out of LIC's record till maturity, surrender or death of the policy holders are included in this.

Is being a LIC policy holder guaranteed to get shares in the IPO?

Absolutely no, there is no guarantee of getting shares in an IPO. It totally depends on the allotment. Policyholders are getting only reservation in IPO. Shares not guaranteed.

Can senior citizens also bid in LIC IPO?

Of course, any person above 18 years of age can apply in this. However, the condition is that the applicant should have a demat account and the PAN number should be updated in the records along with the policy.

Will those with the policy of Pradhan Mantri Vaya Vandana Yojana also be eligible to invest in LIC IPO?

Yes, all policy holders other than Group Policy are eligible to bid under the reservation provided in LIC IPO. Necessary conditions have to be fulfilled.

Can I participate in IPO without even opening a demat account?

No. LIC has clarified that whether it is a policy holder or a common investor, according to SEBI rules, it is necessary to have a demat account to buy IPO or shares of any company. Hence, a demat account is also necessary for investing in LIC IPO.

Where and how to open a new account if I do not have a demat account?

Both NSDL and CDSL can open a demat account with any of the depositories. Apart from this, a demat account can also be opened with a brokerage house. From there the trading account is also opened.

Can I apply for an IPO through a life insurance policy of another company?

No. Only LIC policy holders can participate in this under reservation. Everyone else has to apply like normal retail investors.

Can a policyholder apply for IPO from someone else's demat account?

No, it is mandatory for policy holders to have their own demat account.

Can you still link LIC policy with PAN number?

Absolutely can. For this a corner is available on LIC's website. You can update it by entering your PAN number, policy number, mobile number and email ID. Apart from this, it can also be updated in any nearest LIC office.

How much discount will policy holders get in IPO?

It is not yet decided how much discount the policy holders will get. But, it is believed that they can get a discount of 5-10 per cent.