Initial Public Offerings

How to Invest in Initial Public Offerings (IPOs) Safely?


With the announcement of the LIC IPO Date & Price near the horizon, there has been a huge buzz regarding the IPO in the stock market. Investing in IPOs turned out to be very profitable for investors in the last couple of years. LIC, or the Life Insurance Corporation of India, is soon launching its IPO. This IPO launch will be the biggest initial public offering in the Indian stock market. LIC is also India’s largest insurance company, and it has built a name for itself over the years.

Due to its heritage and reputation, many people, including several of its policyholders, wish to invest in the upcoming LIC. If you, too, wish to invest in the LIC IPO, but have never invested in the share market before, we are here to guide you. Here are a few things you need to keep in mind to safely invest in an IPO or initial public offering.

Open Demat Account With a Registered DP 

An IPO gives the general public a chance to become investors in a company’s shares for the first time. Since, after all, you are investing in the company shares, you require a Demat account to store those shares safely in a digital or dematerialized format. Having shares stored in the digital format in your Demat account protects them from physical damage, and you do not have to worry about misplacing them. Shares in your Demat account are also better protected from theft than physical shares. So before you can invest, it is essential to get your Demat account right.

With an online stockbroker, you can open this Demat account, like a bank for shares. However, you should ensure that the stockbroker is a registered depository participant or DP. It is essential because the depositories, either the CDSL or NSDL, will maintain your Demat account. You also need a trading account to buy and sell your shares, including IPO shares. Most registered DPs let you open both a Demat account and a trading account simultaneously. Depending on the policies of the DP, you may have to pay a Demat account opening fee. To open a Demat account with IIFL Securities, you do not have to pay any opening fee.

Modern brokers like IIFL Securities let you open your Demat account online through a completely paperless process. However, to open a Demat account, you will have to provide digital documents for identity proof, address proof and bank details. These documents include your PAN, Aadhaar card, passport or electricity bill.

Investing in an IPO

Once you open a Demat account with a registered DP, you can invest in an IPO if the IPO is open for subscription. If there is an IPO open for subscription, you can use the stockbroker’s official trading platform or website to invest in the IPO.

For instance, in the case of IIFL Securities, you can invest in an IPO using the IIFL Markets App. The IIFL Markets App is IIFL’s official trading platform for mobile that you can download from the App Store or PlayStore. You can also safely invest in an IPO using IIFL’s official website. IIFL also gives its account holders a third safe and convenient option to invest in an IPO. This third method is via the official IIFL Securities WhatsApp channel 9892691696. With IIFL, you can invest in an IPO by sending a few texts on WhatsApp.

After choosing your medium for applying for the IPO, you place your bid and enter the number of lots you wish to bid for. Depending on the features of the IPO, there is a minimum and maximum bidding price. Likewise, there is a minimum and a maximum number of lots you can bid for. After you place your bid, you will need to pay a certain amount to purchase the shares if you get allotted the shares. You can make this payment using the UPI payment method or methods like net banking. If you are not allotted the IPO shares, your DP will refund your money to your bank account.

LIC IPO Date & Price

The authorities will soon announce the date and price of the LIC IPO. But before you join the bandwagon and get ready to invest in LIC, it is always a good thing to learn about the strengths and weaknesses of the company. It applies to all your IPO and investments, even if the company is as big as LIC. You can learn about the strengths and weaknesses of LIC and get updates regarding the LIC IPO’s date and price on the IIFL’s website.

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