With Life Insurance Corporation of India’s (LIC) IPO just around the corner, investors are all geared up to make the best out of the opportunity. The insurance giant’s IPO is considered to be one of the biggest Indian markets have seen and the interest it is generating is unparallel.
LIC as a life insurance provider has touched the lives of many. It will be rare to find a household in India without at least one LIC policy. But does this loyal client base have any advantage when you apply for LIC IPO? Let’s take a look.
LIC has made it clear that its policyholders can apply for LIC’s IPO. But there are two important steps that you should follow to make sure you can apply when it's time. Let’s see what they are.
LIC has been urging its policyholders to link their PAN cards with their policy for some time now. It is so that verification and income tax procedures are done with ease. Linking your PAN card with your LIC policy will make applying for the IPO easy as well. This is because a PAN card is necessary for you to trade in India as it is linked with the income tax department. This helps the department track and make sure you pay the correct income tax.
Just like having a PAN card, a demat account is important too for applying. The demat account is where your shares will be stored if you are allotted shares. Shares are no longer allowed to trade or issued through physical receipts and a demat account becomes necessary. This is not just for IPO; in fact, all stock markets trades require a demat account.
LIC has said that policyholders in LIC can apply for IPO at a discounted rate. Furthermore, the company has reserved 10% of its shares in IPO for its customers. If you are someone who is looking to invest in LIC IPO and have a policy, make sure you link your PAN card to your policy and have opened a demat account to be ready when it's time to apply. Both demat account and PAN card linkage are mandatory to apply for LIC IPO as a policyholder.
As said above, LIC has said that they are going to issue stocks to policyholders at a discount. But a common confusion here is regarding joint policyholders. This is because a lot of LIC policies are in fact joint ones. But the answer here is yes. But the caveat here is that only one of the policyholders can apply for the same. The person who intends to apply should link their PAN card and open a demat account to be eligible.
Don’t have a LIC policy but still want to apply for the IPO? Fret not, you can do that as a retail investor but without a discount and a reservation. But whether you have a policy or not, a demat account is necessary for you to apply for LIC IPO. Open demat account with a trusted broker to make sure you are ready when it's time to apply.
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