The Life Insurance Corporation (LIC) opened its public offer, the country's biggest IPO, for subscription for retail and institutional investors on Wednesday.
The insurance behemoth is eyeing to raise about Rs 21,000 crore through the initial public offering, which will close on May 9 (Monday).
Here is what you need to know to bid for the stocks:
Demat account
Stock transactions are carried out only through dematerialised (Demat) accounts, much like bank transactions done through bank accounts.
A demat account could be opened either online or offline through a SEBI-approved stock broking firm. Log in to www.cdslindia.com/DP/dplist.aspx to find SEBI-recognised companies.
A demat account could be opened online by providing PAN, proof of address, and passport-size photograph.
LIC policy
Relaxations will be available to LIC policy holders, if s/he had taken the policy before February 13, 2022, and have linked the policy with her/his PAN. Additionally, the bank demat account through which policy payments are made, too, should be linked to the same PAN.
For non-policy holders, demat, bank account/UPI should be linked to the same PAN.
How to invest?
Application: After opening a demat account, the investor could apply for IPO via the website or app of an authorised broking company. The 'IPO' option should be used if the investor is opting for internet banking.
The application should be made for a minimum 15 shares or its multiples. Three options are available: policy holder, retail and employee. If the investor is not a policy owner, s/he should select the 'retail' option.
A policy holder could select both 'policy holder' and 'retail' options to bid for the shares.
Bidding
The LIC has fixed a price band of Rs 902 to 949 per equity share. The investor could bid in two ways: s/he could either bid with the cutoff price or any amount between the base price and the cutoff. For instance, if bidding for Rs 905, it would be rejected if the final price is the same. But if the bid is made for above Rs 905, this would not be applicable. The cutoff option is to avoid such rejection.
The application would be considered based on the final bidded price.
If the investor is opting for making the payment through UPI, a request will be forward to the app. Once the request is accepted, the amount mentioned would be 'locked' in your account.
Pricing
The final pricing will be fixed after examining all the applications. If there are more applicants, lots would be drawn for allotment of shares. The allotment would be known by May 12.
Once finalised, the financial transactions would be completed and the shares would reach the demat account. LIC will list on the share market on May 17.
Checklist
- To know if the PAN has been linked with the policy, visit licindia.in and click on the 'Online Pan Registration' in the menu before clicking on 'Check Policy PAN Status.'
- If the policy is jointly held, both the owners will get the relaxation accorded to policyholders.
- Use own UPI ID (the account linked to PAN) while bidding.
- Non-institutional investors (NII) can bid for a value exceeding Rs 2 lakh. But s/he cannot participate in retail bidding. Likewise, those going for retain bidding cannot opt for NII quota, which won't have any discounts