LIC policyholders can get its shares at a discount: Pandey

“Under the retail window, there is some reservation. We also have policyholders’ window. We have made provision under the LIC Act that certain discounts up to 10% can be offered to policyholders on a competitive basis. There will be reservation for employees also.”

Some relaxation can also be expected for retail investors and employees, said two people close to the transaction advisors for the IPO, requesting anonymity, but declined to give details. Pandey, however, confirmed the possibility of relaxation only to LIC policyholders and did not comment on other categories of investors.

Discounts may be offered to small investors as the government wants to encourage common man’s participation in LIC’s proposed IPO, said one of the persons mentioned above. Advisors expect the size of the issue to be between 5% and 10%.

Pandey said that the DRHP will reveal what percentage of the government’s stake in LIC will be reduced through the IPO. “A minimum of 5% is definitely expected,” he said.

He said the shortfall in expected disinvestment proceeds in the Revised Estimates (RE) stage of 2021-22 has nothing to do with the size of the IPO and the valuation of LIC as the government’s disinvestment receipts in the current financial year have crossed even the RE figure. can.

The budget presented on February 1 lowered the disinvestment target from the original budget estimate (BE) of 1.75 trillion to 78,000 crore in 2021-22. Disinvestment target (in BE for 2022-23) is also conservative 65,000 crores.

Pandey said the disinvestment target and actual receipts may vary due to various reasons and should not be related to the size of LIC’s IPO.