PMJJBY policyholders also eligible for LIC IPO 'quota benefits'

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) subscribers are also eligible to avail the quota benefits reserved for the LIC policyholders, Life Insurance Corporation of India Chairman M R Kumar said on Monday.

As per the Draft Red Herring Prospectus submitted by Life Insurance Corporation of India with the market regulator SEBI recently, 10 per cent of the total LIC share offer will be kept reserved for the LIC policyholders. There are also speculations about discounts. However, the LIC has not yet announced any plan for offering discounts to the policyholders in the proposed IPO.

"I want to clarify that the policyholders of PMJJBY are also eligible to apply in our IPO as the scheme is offered by LIC," Kumar said in a virtual interaction with media persons.

The PMJJBY is an insurance scheme launched by the Prime Minister for people in the age group of 18 to 50 years. Risk coverage under this scheme is for Rs 2 lakh in case of death of the insured, due to any reason. The premium is Rs 330 per annum. The scheme is being offered by the Life Insurance Corporation of India and all other life insurers who are willing to offer the product on similar terms with necessary approvals and tie-up with banks for this purpose.

Kumar said the IPO will be in the market in the current financial year and listing is also expected by March-end.

"Valuation is currently going on and right now we can't predict how much money LIC will get by diluting its 5 per cent stake," he said.

LIC's IPO is expected to obtain regulatory approval by the first week of March after which an indicative marketing price band will be set, LIC chairman said.

Kumar said LIC is well-capitalised and does not require any fresh capital infusion. "Going forward, if there is any growth capital requirement, we will approach not only the govt but all the shareholders," he said.

Kumar further added that LIC's potential investors should not worry about government control post the IPO as decisions in the country's largest insurance company are taken by its board and not by the government, which will hold 95 per cent of the stake post the IPO.