In the run-up to its initial public offering (IPO), the Life Insurance Corporation (LIC) has asked its policyholders to update their Permanent Account Number (PAN), so that they can take part in the offering.
On Wednesday, LIC had also put out an advertisement in leading newspapers calling upon its policyholders to update their PAN details as it is important from a KYC (Know-Your-Customer) perspective as well as open Demat accounts to participate in the IPO.
According to the proposed plan, up to 10% of the IPO's issue size would be reserved for LIC's policyholders.
"In order to participate in any such public offering, policyholders will need to ensure that their PAN details are updated in the Corporation's records. Further subscribing to any public offering in India is only possible if you have a valid DEMAT account," the state insurer said in a public notice.
In relation to DEMAT accounts, LIC said, if a policyholder currently does not hold a valid DEMAT account, he or she should consider opening it at their own cost.
"You would incur costs towards opening of a DEMAT account and or PAN issuance and maintaining the DEMAT account or other ancillary costs. All such costs would have to be solely borne by you. No costs would be borne by the Corporation," it clarified.
Documents needed to update PAN details
How to update PAN if not in LIC database
How to check LIC-PAN status
The Union Cabinet in July 2021 cleared disinvestment of the country's largest insurer LIC and a panel headed by the finance minister has been authorised to decide on the quantum of stake dilution.
The government has already brought in required legislative amendments in the LIC Act for the proposed IPO through the Finance Act 2022.
In her Budget speech in February this year, Finance Minister Nirmala Sitharaman said the IPO of LIC would be floated in 2021-22.
The listing of LIC will be crucial for the government to meet its disinvestment target. The government aims to mop up Rs 1.75 lakh crore in the current fiscal from minority stake sale and privatisation.
Of the Rs 1.75 lakh crore, Rs 1 lakh crore is to come from selling the government's stakes in public sector banks and financial institutions. The remaining Rs 75,000 crore would come as CPSE disinvestment receipts.
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