According to the draft Red Herring prospectus filed by the Life Insurance Corporation of India (LIC), under the insurer’s upcoming initial public offering (IPO), around 316 million shares are reserved for LIC policyholders only. . If we add the insurer’s employees and retail investors interested in participating in the IPO, this number becomes even larger. To request shares, one would need a demat account.
According to data from NSDL (National Securities Depository Limited), there are approximately 25.48 million active deposit accounts. Central Depository Services (India) (CDSL) has approximately 58.49 million accounts. In anticipation of LIC’s mega IPO, stockbrokers are taking steps to woo investors.
LIC is a household name and according to Brand Finance, a London-based consultancy, the insurer’s brand value is estimated at $8.1 billion. So when a company of this size hits the capital markets, it is bound to create a buzz, and stockbrokers hope to cash in on that buzz.
Opening a DEMAT account via CSC…
The VLEs can help each insured person by opening their DEMAT account in addition to the PAN card.
— CSCeGov (@CSCegov_) February 14, 2022
There may be many first-time investors, including LIC policyholders, who may wish to open a demat account so that they can also apply for shares in the IPO. Exploiting this opportunity, several brokers have either opened dedicated portals or launched marketing campaigns centered around the LIC IPO.
“We run free Demat programs for our partners who want to motivate LIC IPO candidates. Additionally, we have encouraged LIC agents to partner with us as introducers to refer clients to PL Our eIPO site will facilitate the subscription of LIC policyholders to this IPO through the reserved quota as well.To meet the demand, we are also keeping our account opening staff in ready mode so that the spike in traffic can be handled well in time. for the IPO,” said Sandip Raichura, CEO of Prabhudas Lilladher, a brokerage and financial services firm.
- Mass Marketing Emails: Many stockbroking firms try to get people to open demat accounts with them to apply for LIC shares. Brokers send letters to their clients and to those who may have already expressed an interest in opening accounts with them, but ultimately did not. Some companies like Fyers, Upstox, and Sharekhan promote their websites and apps through email.
- Dedicated portals, applications, telephone lines: Some stockbrokers have launched dedicated portals and mobile apps to help customers open a free demat account and also pre-apply for the LIC IPO. Upstox, for example, promotes its dedicated phone lines. Religare Broking has launched a “pre-application” application.
- Freebies: Some brokers bundle various services and even offer brokerage credits, free account opening, and other fee waivers to their clients. Some have partnered with other companies to provide additional benefits. For example, Sharekhan offers some benefits for referrals.
- Educational actions: Some brokers choose to educate investors on the basics such as what it means to invest directly in stock markets, what are the key factors to look out for, etc. This is an indirect approach to acquiring customers and more of a long-term marketing. practice.
Many more such techniques are expected to be deployed as LIC IPO dates may be announced soon.