India is planning one of the biggest IPOs ever. The government plans to sell a 5% stake in Life Insurance Corp of India and is aiming to raise around Rs 654 billion, for which roadshows have already begun. Shares could be priced between Rs 2,000 to Rs 2,100 each. The issue is slated to run from March 10-14 if regulatory approvals come in on time.
Life Insurance Corporation of India has reserved up to 35 percent of its total IPO size for retail investors.
"LIC IPO is expected to hit the market soon that may bring at least 1 crore new demat accounts and that could be a big positive for the dynamics of the Indian market because if 10 percent of these investors become active then it will increase participation of retail investors and it will also help the government to generate revenue through STT," said Santosh Meena, Head of Research at Swastika Investmart.
So, if you are looking to invest in the IPO, here is a list of do's and don'ts that you must follow to ensure your application form does not get rejected.
Do's:
Check if you are eligible to apply as per the terms of the Red Herring Prospectus and under applicable law, rules, regulations, guidelines and approvals; All Bidders (other than Anchor Investors) should submit their Bids through the ASBA process only. Investors may submit their ASBA Applications to self certified syndicate banks. ASBA (Applications Supported by Blocked Amount) is a process developed by market regulator Sebi for applying to IPOs, Rights issue, FPS etc. In ASBA, an IPO applicant's bank account doesn't get debited until shares are allotted to them.
Ensure that you have bids within the price band.
Read all the instructions carefully and complete the Bid cum Application Form in the prescribed form. Ensure that you (other than the Anchor Investors) have mentioned the correct details of ASBA Account (i.e. bank account number or UPI ID, as applicable) in the Bid cum Application Form.
If you are using the UPI Mechanism ensure that you have mentioned the correct UPI ID (with maximum length of 45 characters including the handle), in the form
Ensure that your Application Form bears the stamp of a Designated Intermediary and is submitted to the Designated Intermediary at the relevant Bidding Centre (except in case of electronic Bids) within the prescribed time.
Use only your own ASBA Account or only your own bank account linked UPI ID (only for retail investors, Eligible Employee(s)and Eligible Policyholder(s)using the UPI Mechanism) to make an application in the Offer and not ASBA Account or bank account linked UPI ID of any third party
Ensure that you have funds equal to the Bid Amount in the ASBA Account maintained with the bank before submitting the form
Ensure that the signature of the first Bidder in case of joint Bids, is included in the Bid cum Application Forms. If the first Bidder is not the ASBA Account holder, ensure that the Application Form is also signed by the ASBA Account holder, ensure that you have mentioned the correct bank account number in form.
Ensure that the names given in the Bid cum Application Form is/are exactly the same as the names in which the beneficiary account is held with the Depository Participant. In case of joint Bids, the Bid cum Application Form should contain the name of only the first Bidder whose name should also appear as the first holder of the beneficiary account held in joint names.
Ensure that you request for and receive a stamped acknowledgement in the form of a counterfoil or acknowledgment specifying the application number as a proof of having accepted the Bid Form for all your Bid options from the concerned Designated Intermediary
Ensure that thumb impressions and signatures other than in the languages specified in the Eighth Schedule to the Constitution of India are attested by a Magistrate or a Notary Public or a Special Executive Magistrate under official seal
Ensure that the category and the investor status is indicated in the Bid cum Application Form to ensure proper upload of your Bid in the electronic Bidding system of the Stock Exchanges
Ensure that in case of Bids under power of attorney or by limited companies, corporates, trust, etc., relevant documents including a copy of the power of attorney, if applicable, are submitted
Ensure that Bids submitted by any person outside India/ Non-Resident is in compliance with applicable foreign and Indian laws
Since the Allotment will be in demat form only, ensure that the depository account is active, the correct DP ID, Client ID, UPI ID (for retain investors, Eligible Employee(s)and Eligible Policyholder(s)Bidding through UPI Mechanism) and the PAN are mentioned in their Application Form and that the name of the Bidder, the DP ID, Client ID, UPI ID (for RIBs, Eligible Employee(s)and Eligible Policyholder(s)Bidding through UPI Mechanism) and the PAN entered into the online IPO system of the Stock Exchanges by the relevant Designated Intermediary, as applicable, matches with the name, DP ID, Client ID, UPI ID and PAN available in the Depository database.
Ensure that you have correctly signed the authorisation / undertaking box in the Bid cum Application Form, or have otherwise provided an authorisation to the Sponsor Banks, as applicable, via the electronic mode, for blocking funds in the ASBA Account equivalent to the Bid Amount mentioned in the form at the time of submission of the Bid
If you are opting for the UPI route, ensure that you authorise the UPI Mandate Request, including in case of any revision of Bids, raised by the Sponsor Banks for blocking of funds equivalent to Bid Amount and subsequent debit of funds in case of Allotment
Ensure that the Demographic Details are updated, true and correct in all respects
Bids by Eligible NRIs for a Bid Amount of less than Rs 200,000 would be considered under the Retail Portion for the purposes of allocation and Bids for a Bid Amount exceeding Rs 200,000 would be considered under the Non-Institutional Portion for allocation in the Offer
Retail investors, Eligible Employee(s)and Eligible Policyholder(s)Bidding using UPI Mechanism through the SCSBs and mobile applications shall ensure that the name of the bank appears in the list of SCSBs which are live on UPI, as displayed on the SEBI website.
Ensure that you have accepted the UPI Mandate Request received from the Sponsor Bank prior to [●]ISTof the Working Day immediately after the Bid/ Offer Closing Date.
The Bid cum Application Form is liable to be rejected if the above instructions, as applicable, are not complied with.
Dont's:
Do not bid for lower than the minimum bid Lot;
Don't submit a Bid using UPI ID, if you are not a retail investor, an Eligible Employee or an Eligible Policyholder
Do not bid for more than Rs 2,00,000 for bids by retail investors in net offer.
Eligible Employee(s)Bidding in the Employee Reservation Portion (net of Employee Discount) and Eligible Policyholder(s)Bidding in the Policyholder Reservation Portion(net of Policyholder Discount) should also not bid over Rs 2 lakh.
Do not Bid/ revise the Bid amount to less than the floor price or higher than the cap price
Do not pay the Bid Amount in cheques, demand drafts or by cash, money order, postal order or by stock invest
Do not send Bid cum Application Forms by post; instead submit the same to the Designated Intermediary only
Do not Bid at Cut-off Price (for Bids by QIBs and Non-Institutional Bidders)
Do not instruct your respective banks to release the funds blocked in the ASBA Account under the ASBA process
Do not submit the Bid for an amount more than funds available in your ASBA account
Do not submit Bids on plain paper or on incomplete or illegible Bid cum Application Forms or on Bid cum Application Forms in a colour prescribed for another category of Bidder
Do not submit a Bid in case you are not eligible to acquire Equity Shares under applicable law or your relevant constitutional documents or otherwise
Do not fill up the Bid cum Application Form such that of the Equity Shares Bid for exceeds the Offer size and / or investment limit or maximum number of the Equity Shares that can be held under the applicable laws or regulations or maximum amount permissible under the applicable regulations or under the terms of the Red Herring Prospectu
Do not Bid for Equity Shares more than specified by respective Stock Exchanges for each category
Do not make the Application Form using third party bank account or using third party linked bank account UPI ID
Anchor Investors should not bid through the ASBA process
Do not submit the Bid Form to any non-SCSB bank or our Corporation
Do not submit the General Index Registration number instead of the PAN
Do not withdraw your Bid or lower the size of your Bid (in terms of quantity of the Equity Shares or the Bid Amount) at any stage, if you are a QIB or a Non-Institutional Bidder
Do not submit Bids to a Designated Intermediary at a location other than at the relevant Bidding Centres
Do not submit incorrect details of the DP ID, Client ID, PAN and UPI ID details if you are a retail investor, Eligible Employee Or an Eligible Policyholder bidding through the UPI Mechanism. Further, do not provide details for a beneficiary account which is suspended or for which details cannot be verified to the Registrar to the Offer
Do not submit the Bid without ensuring that funds equivalent to the entire Bid Amount are available for blocking in the relevant ASBA account.
Do not link the UPI ID with a bank account maintained with a bank that is not UPI 2.0 certified by the NPCI in case of Bids submitted by retail investors using the UPI Mechanism
Do not submit more than one Bid cum Application Form for each UPI ID in case of RIBs Bidding using the UPI Mechanism
Retail investors, eligible employees bidding in the Employee Reservation Portion and Eligible Policyholders Bidding in the Policyholder Reservation Portion through the UPI Mechanism using the incorrect UPI handle or using a bank account of an SCSB or a bank which is not mentioned in the list provided in the SEBI website is liable to be rejected
