The initial public offering of LIC (Life Insurance Corporation) is going to be the biggest one that India has ever witnessed so far. Several individuals across the nation have bought policies from this company just to be eligible to participate in this event. With such hype and enthusiasm among investors, one should be aware of every possible hack to increase his or her chances of share allotment in this blockbuster event.
Tips to Increase Your Chances of Allotment in the LIC IPO
Investors from the entire nation and abroad are eagerly waiting for this mega IPO to go live. So, here are some useful tips to help you increase your chances of share allotment in this initial share sale.
Tip 1: Subscribe through friends and family De-mat accounts
Refer your friends and family and avail of gift vouchers up to Rs.500.
Tip 2: Go for Small Bids
The allotment procedure of SEBI gives equal preference to all the retail investors subscribing to an IPO. So, placing small bids from multiple accounts instead of going for big bids using a single account vastly increases your chances of share allotment. Opting for smaller bids in this public issue will help you invest the remaining money in other IPOs as well.
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Tip 3: Don’t Apply at the Last Moment
If you have already decided to subscribe to the LIC IPO, do it as soon as it goes live. Applications at the eleventh hour are often unsuccessful due to a lack of response from the bank’s end. Several reasons like high QIB and HNI subscriptions and technical issues can prevent banks from acknowledging your application at the last moment. So, try to apply for the IPO in the first two days.
Tip 4: Don’t Go below the Cut-off Price
A cut-off price in an initial public offering is the upper limit of the price band set by the company. Hyped IPOs like the one from LIC often end up oversubscribed, which means that everyone has bid for shares at the cut-off price. If you bid at a price lower than that in such a scenario, your chances of securing an allotment are next to zero. You should also know that the company refunds the excess amount if the price is lower.
Tip 5: Be Careful with the Application Form
You have waited long enough for this mega IPO of LIC. So, don’t rush and commit any errors while filling out the application form for this public issue. Fill in all the details like name, amount, bank details, DP ID, etc., correctly. In this regard, one can also opt for printed forms to minimize the chances of any error. However, the simplest and most secure method of applying for this IPO is via ASBA.
Tip 6: For the Employees of LIC
Your chances of securing an allotment of shares in the LIC IPO are significantly higher if you are an employee of this company. The largest insurer in India has reserved 1.58 crore shares for its employees. In addition, an employee of LIC can subscribe to this mega IPO via the retail category if he or she fulfills the eligibility parameters.
Tip 7: For the Policyholders of LIC
LIC has additionally reserved 3.16 crore equity shares in this much-awaited public issue for its 26 crore policyholders. So, you have a higher chance of share allotment in this initial share sale if you hold a valid policy from this insurer. A policyholder who is also an employee of LIC can apply through the employee and retail category as well. However, only individuals who have Demat accounts and have linked their PAN to their policy are eligible to subscribe to this initial public offering.
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Experts believe that such hype and enthusiasm among native as well as foreign investors will likely lead to an oversubscription of the LIC IPO. Oversubscriptions often come with listing gains. However, securing an allotment of shares also becomes more difficult in such cases. Hence, individuals can go through the tips mentioned above to increase their chances of share allotment in this much-awaited initial public offering of LIC.
Individuals who are willing to make investments in the future can also open a Demat account with Angel One (website/app) instantly through an easy and streamlined procedure. They can also check the Angel One blogs section for more updates on the stock market, IPO and business news.
Frequently Asked Questions
Who are the lead managers for LIC IPO?
The book-running lead managers for this initial public offering of LIC are Axis Capital, Kotak Mahindra Capital Company, BofA Securities, Nomura Financial Advisory, Citigroup Global Markets, ICICI Securities, Goldman Sachs (India) Securities, JP Morgan India Private Limited, SBI Capital Markets, and JM Financial.
What is the embedded value of this company?
The DRHP filed with SEBI states that the embedded value of LIC as of 30 September 2021 is Rs. 5,39,686 crores.
What will be the face value of LIC IPO?
For this initial share sale, LIC has a fixed face value of Rs. 10 per equity share.
Can an investor bid for LIC IPO in multiple categories?
Applications made in the Retail category and Non- Institutional category would be considered as multiple Bids and both the Bids will be rejected.
Can I apply for LIC IPO under both policyholder and employee quotas?
Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.