Home / Markets / Ipo /  LIC IPO: Why policyholders, employees apply for maximum lots — explained

LIC IPO: The Initial Public Offering (IPO) of the insurance behemoth opened for subscription yesterday and it will remain open for subscription till 9th May 2022. As potential bidders are busy scanning financials of the Life Insurance Corporation (LIC) of India, analysts have advised LIC policyholders and employees category applicants to apply for maximum possible lots that they can afford. They advised the reserved category subscribers to prefer to their policyholder and employees category ahead of retail category because allotment of shares in retail category will be done through draw of lots whereas in reserved category, it will be done through proportionate basis. They said that chances of getting shares through allotment are higher in reserved category in comparison to retail category applications.

Speaking on why LIC IPO applicant should prefer to reserved category ahead of retail category, Avinash Gorakshkar, Head of Research at Profitmart Securities said, "Share allotment in retail category will be done through draw of lots whereas in policyholders and employees category, share allotment will be done through proportionate basis. So, in share allocation process, retail category applicants will get lots through allotment or a minimum of 15 LIC shares if their application gets through the lucky draw. However, in the case of policyholders and employees category, all applicants will be given at least some share(s) on the proportionate basis that means share allotment for reserved category applicants won't be done on the basis of lots."

Avinash Gorakshkar of Profitmart Securities said that one should apply as much of lots as one can if it falls under the category of LIC policyholder and employees category. by doing this, they will be able to enhance their chances of getting more LIC shares.

Echoing with Avinash Gorakshkar's views, Anuj Gupta, Vice President — Research at IIFL Securities said, "If an applicant falls under policyholders category, then in that case it should first apply from this category as it will help the applicant get 60 discount on each LIC shares. Apart from this, the applicant should apply as much of applications that he or she can afford as more lots in reserved category means more share allotment during share allocation process. but, in retail category, one will get either one lot or 15 shares or nothing."

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.


Asit Manohar

Chief Content Producer at Live Mint Digital Team
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