LIC IPO for Policyholder: What is proportional allotment and what is basis of allotment? Anil Singhvi explains!

LIC IPO for Policyholder: What is proportional basis allotment in LIC IPO issue? Zee Business Managing Editor Anil Singhvi explains. Proportional issue allotment means that shares will be allocated to investors in the proportion in which they have been subscribed.

As an example, if the issue under the policyholder quota is subscribed 10 times, then the shares will be allotted based on the allotment ratio.

Under the policyholder quota one can subscribe for shares amounting to Rs 2 lakh or 210 shares. He said that in this particular issue, everybody has a chance which means that if one applies for higher number of shares, the chances for higher allotment becomes strong.

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पॉलिसी होल्डर कोटा में proportional basis allotment क्या होता है?

अगर ₹949 पर अप्लाई किया और अलॉटमेंट प्राइस ₹902 तय हुई तो क्या होगा?

जानिए इन सवालों के जवाब @AnilSinghvi_ से LIC IPO की पाठशाला पार्ट-2 में...@deepdbhandari pic.twitter.com/Yb8vlmhl5T

— Zee Business (@ZeeBusiness) May 4, 2022

In employee quota and policyholder quota, more number of lots one applies, higher the allotment will be for him/her. Meanwhile, in retail quota one lot will be given to all and then higher no of lots one has subscribed to, the higher his allotment will be, the Managing Editor said. But the limit still remains up to Rs 2 lakh or 210 shares, he further said.

He also clarified that no matter at what bid price the application is mage, if the allotment price is lower than the lower price will be considered. He was responding to a question that if an investor has applied at a price of Rs 949 and the allotment is done at Rs 902 then what will happen and at what level will the discount be given.

Singhvi said that investors must not be worried about.

However, if the investor has applied at a lower price, and the allotment price is above than the application will get rejected, he said advising investors to apply at a ceiling price of the price band.

The LIC IPO opened today and will close on 9 May. The isue was overall subscribe 0.63 times on the BSE. The policyholder category was subscribe 1.85 times while the employee category was subscribed 1.05 times. As for Retail Individual Investors (RIIs), Non Institutional Investors and Qualified Institutional Buyers, the subscription stood at 0.56, 0.25 and 0.33 times respectively. The data was taken at 5.15 pm.