An IPO or Initial Public Offering is the first sale of shares by a privately owned company to the public. The private companies raise funds publicly through the IPO for working capital, acquisitions, debt repayment, and other internal purposes. You can apply for IPO in India by filing an online application on the broker or bank website.
The Life Insurance Corporation of India, or the LIC IPO, has recently created an uproar. The government has encouraged foreign investors and Indian citizens to invest in it. Insurers have filed their drafts through theSecurities and Exchange Board of India and mentioned different indicators before investment:
Possible measures
The Indian government has taken all the measures to ensure the IPO becomes a success. People have received personal text messages and newspaper advertisements to make sure they understand the IPO and invest in it. The government also aims to raise somewhere between Rs. 4,000 to Rs. 1 lakh crore through this IPO.
Foreign investment
The Ministry of Industry and Commerce has also made a few amendments using the FDI policy to receive maximum participation from foreign investors. The LIC IPO date commences on May 4, 2022, and closes on May 9, 2022.
Benefits for policyholders
The IPO value is Rs. 6.07 lakh crore. The share allotment starts on May 12 and will get credited to the Demat Account on May 16. The stock begins trading in the secondary market from May 17 onwards. The Indian government has fixed the LIC IPO price band at Rs. 902 to Rs. 949 per equity share. It has also announced a discount of Rs. 60 for policyholders and Rs. 45 for retail investors and employees.
Investment tips
Knowing everything about the company before investing time, money, and effort is essential. Recently, many have opted for IPOs to get themselves listed on the stock exchange. However, be smart and invest in them wisely by following these tips:
Research well
While investing in the LIC IPO, carry out the best research on the company. Be well versed with the activities they undertake, the financial soundness that they possess, the way their employees feel about the company, the CSR activities carried out by them, the press reports and interviews of the company professionals, etc. When you know such information, your investing decision becomes easier to undertake.
Read the prospectus carefully
The Red Herring prospectus is the only document highlighting the various uses of the money collected through the IPO process. It gives an idea of the potential area where your invested capitalgoes. If the company uses it for growth, consider investing in the public offering.
Strong underwriter
An ‘underwriter’ is the investment bank that buys the shares from the company and resells them to the public. Select a company with a solid underwriter to help you purchase pre-IPO shares quickly.