As the government of India moves forward to achieve one of its biggest divestment targets by floating the LIC IPO, common people in the country are also gearing up to invest in the offer. The initial public offering (IPO) of the Life Insurance Corporation of India (LIC) is aiming to bring in as many bidders as possible. For many, the LIC IPO will be their first step at the stock market, as the offer is already being touted as India’s biggest. The LIC is also reportedly trying to woo in bidders by creating separate provisions for its policyholders, many of who are new to the stock market, and do not even have a demat account.
In this scenario, a demat account is the first thing a potential bidder will need to place bids for the LIC IPO, or any other public offers as such.
What is a Demat Account?
Demat account, or a Dematerialisation account, is important for an investor to invest in stocks. According to a report by Business Insider, fuelled by the stock market surge over the pas year, demat account holders in India increased by almost 50 per cent to around 6 crore as of June last year. The shift of Indian investors from risk-free savings like fixed deposit to stock markets, as well as a recent IPO boom are among the main reasons behind the surge, reports suggest.
A Demat account helps an investor to convert the share certificates from physical form to electronic form to provide easier access to them. The LIC has also encouraged policyholders to open demat accounts ahead of its IPO to participate in the bidding process.
Here are the Steps to Open a Demat Account
– Choose a broker you want to open your demat account with. Online banks, stockbrokers and digital investment platforms in India offer demat acocunts
– Visit the broker’s website and initiate the demat account opening procedure and assign a nominee to your account
– Fill out the form and then complete the KYC (Know your Customer) process by providing relevant information
– You then need to provide scanned copies of documents like identity proof, address proof, bank account statement and income proof
– Pay the fees required for trading with the brokerage after submission and verification
– You also need to do an In-Person Verification with the brokerage house, either online or by visiting their office. This step is mandatory
– After your request to open a demat account is approved, you will receive a unique 16-digit beneficial owner identification number, also called the demat account number. This will be used to access your demat account online
– You are all set to start your investment journey. Log in to your demat account online and start trading
With a demat account, you can not only invest in LIC IPO, but also invest in other good stocks.
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