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Tag: Demat

  • LIC IPO: Everything Retail Investors and LIC Employees Should Know

    Human beings not only think about their present but also about their future, so it is significant to do something that will at least give them financial security and help them in growing their wealth. None of us is aware of our future, so instead of sitting quietly and doing nothing, it is better to invest in something that can at least play the role of an umbrella for us during a rainy day.

    Life Insurance Corporation of India also known as LIC is the biggest life insurance company in the country. If you live in India, there is no way, you haven’t heard about LIC. This life insurance company has captured 70% of the market share and is under the Government of India. In this, we are going to talk about LIC IPO, what it exactly is and what are the things we need to know before investing in them. So, let’s get right into it.

    “It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” —Robert Kiyosaki

    What Is LIC IPO?
    Things You Need to Know Before Investing In LIC IPO
    When Will LIC IPO Launch?

    What Is LIC IPO?

    LIC IPO is LIC’s Initial Public Offering where they are offering shares of LIC as the Government has decided to sell some of its stakes. Recently LIC made headlines after submitting Draft Red Herring Prospectus (DRHP).

    The Government of India has decided to sell 5% of its stake, therefore 95% stake of the company will remain under the Government. Among the public offering, 35% will be booked for the retail investors, the other 5% for the employees of LIC and 10% will be reserved for the policyholders.

    Things You Need to Know Before Investing In LIC IPO

    Investing in something is a very important decision that one has to take; you have been very clear and careful before doing anything related to this as it is about the financial security of your future.

    • As per the information, LIC policyholders who got their policy on or before the 13th of February, 2022 are eligible to invest in the 10% of public offerings that is reserved for the policyholders.
    • If anyone wants to be eligible in the quota for the policyholders, their PAN has to be linked with their policyholders. Those who have already linked their policyholders with their PAN on or before the 28thof February 2022 are eligible for the 10% quota.
    • Policyholders who have their Demat account are eligible for the 10% quota.
    • As 35% are reserved for retail investors, it means anyone who is not a LIC employee or a policyholder can apply to this quota. Policyholders, as well as employees of LIC, can also apply to this quota.
    • A retail investor is allowed to invest max to max INR 2 Lakhs, not more than that in their quota of LIC IPO.
    • LIC policyholders are allowed to invest INR 2 Lakhs under their quota of IPO.
    • LIC Employees are also eligible to invest a maximum of INR 2 Lakhs under their quota of IPO.
    • A policyholder who is not a LIC employee can invest a total of INR 4 Lakhs that is INR 2 Lakhs in the quota of retail category and INR 2 Lakhs in the policyholder category.
    • A LIC employee can invest up to INR 6 Lakhs if they are also a LIC Policyholder. It means INR 2 Lakhs under the quota of retail category, INR 2 Lakhs under the quota of policyholder category and another INR 2 Lakhs under the quota of LIC employee category.
    • If policyholder wants to avoid getting their application rejected under the policyholder quota, then they must ensure that they are primary Demat account holder.
    • If there are joint policyholders then they can apply under the policyholder’s quota, if only they have separate Demat accounts.

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    When Will LIC IPO Launch?

    LIC IPO will be open to the public in the month of April 2022. The total offering is 31.6 Crore shares. It is also said that LIC employees and policyholders are eligible to get discounts on the floor price as well.

    Conclusion

    LIC is one of the biggest insurance companies in India founded in 1956 and is completely owned by the government. It is one of the most awaited IPOs since the launch of Zomato, Nykaa and Paytm IPO. It is expected to be one of the biggest IPO launches. People are eagerly waiting for LIC IPO so that they can invest in it.

    FAQs

    Who are the shareholders of LIC?

    The government of India is the major shareholder and will remain the majority shareholder of LIC, only 10% is being sold to policyholders.

    When will LIC IPO launch?

    The LIC IPO will be open to the public on March 11, 2022.

    How can I buy LIC shares?

    If you’re a retail investor you can buy LIC shares using your UPI id.

  • Zerodha vs 5paisa: The Top Contenders In The Brokerage Industry

    This stock broker comparison is between two of the biggest discount brokers in India. This article will compare 5paisa and Zerodha based on their brokerage charges, account opening charges, maintenance charges, exposure margin, trading platform and more. This comparison will help highlight the major difference between these two brokers to help you find the best on your preference.

    A brief history on Zerodha

    Zerodha is the biggest private discount broker in India and was founded in the year 2010 by Nitin Kamath. It is known to be one of the best for traders and investors looking for low brokerage, reliable trading platform and easy interface. It has over 2.2 million clients that contribute over 15% of daily retail trading volumes across NSE, BSE and MCX. Zerodha is the largest stockbroker in India and is headquartered in Bangalore. It offers zero brokerage on delivery trading and a flat rate of 0.03% or Rs 20 per executed on other segments.

    Zerodha offers a zero brokerage charges for delivery equity investment and direct mutual fund investments. For the other services like F&O, currency and commodity trades across NSE, BSE, and MCX it offers a flat brokerage of flat Rs 20 irrespective of the trading volume. The number of active clients on NSE is 9,09,008 as of November 2019. The other services it offers it offers Direct Mutual fund investments, Kite APIs.

    Zerodha vs. 5paisa logo
    Zerodha vs. 5paisa logo

    A brief history on 5paisa

    5paisa is a public discount broker that provides you the platform to trade in stocks, futures and other option at the lowest cost of Rs 20 flat per trade, even if you trade 10 crore. It is headquartered in Mumbai and is a part of India Infoline (IIFL). It is leading non-banking financial institution in India with two decade long experience as it was initially incorporated in 1995. 5paisa was relaunched in 2016.

    It was reintroduced new brokerage model for online retail broking services and also got demerged itself from IIFL so that it can get listed on the stock exchange. 5paisa capital started trading on NSE/BSE in November 2017 making it the first to be listed in the financial digital marketplace. 5paisa capital provides a platform for all financial products which include equities, derivatives, mutual funds, commodities, bond and debentures, insurance and personal loans.

    The account opening process for 5paisa is totally paperless based on Aadhaar. 5paisa provides the trading facility in mobile, browser and desktop platforms. The number of active clients on NSE is 1,06,280 as of November 2019. The other services it offers are Mutual Fund Investments, Research reports, etc.

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    The side by side comparison of 5paisa and Zerodha

    5paisa vs Zerodha Charges and AMC

    5paisa trading account charges is Rs 650 while Zerodha takes Rs 200 as account opening charges. 5paisa Demat Account AMC (annual management charges) charges is Rs 540 which is charged at Rs 45 per traded month and Zerodha Demat account AMC charges is Rs 300.

    Types of AMC 5paisa Zerodha
    Trading Account Opening Charges ₹650 ₹200
    Trading Account AMC Charges free free
    Demat Account Opening Charges free free
    Demat Account AMC Charges ₹540 (₹45 per trade) ₹300

    About brokerage plans and brokerage charges

    Both the platforms do not provide multiple, monthly or yearly plans and only offer single broker plans. But when it comes to brokerage plan details 5paisa is a discount broker which charges a flat fee of Rs 20 per executed order for equity cash and equity F&O, including currency and commodity. This is the lowest brokerage plan offered by the offered by the best brokerage house in India. Zerodha on the other hand, charges Rs 20 or .03% whichever is lower for equity intraday, F&O, currency and commodity. No other upfront brokerage or turnover commitments on your trade.

    Brokerage Charges 5paisa Zerodha
    Plan Name Flat Fee Rs 20 Trading Plan Max Rs 20 per order Trading Plan
    Equity Intraday, Futures, Options Flat Fee Rs 20 0.03% or Rs 20 whichever is lower
    Currency Futures, Commodity Trading Flat Fee Rs 20 Flat Fee Rs 20
    Call & Trade Charges Rs 100 per call(No limit of orders) Rs 50 Per Executable Order

    Demat account opening charges

    This table shows the difference demat services that both the broker services provide and its charges.

    Demat account 5paisa Zerodha
    Demat Account Opening Fee Nil ₹50 (Stamp charges payable upfront)
    Demat Account AMC ₹540 (Charge ₹45 per traded month) Individuals/Non Individual – ₹300 + GST Non Individual – Corporate – ₹1000
    Dematerialisation Charges ₹15 per certificate + ₹40 as postal charges ₹150 per certificate (+ ₹100 Courier charges)
    Rematerialisation Charges ₹15 per certificate or ₹15 for every 100 securities or part thereof whichever is higher + ₹40 for courier ₹150 per certificate + CDSL charges + ₹100 Courier charges
    Transaction Charges (Debit or Sell) ₹12.50 per transaction per script • Market Trades: ₹8 + ₹5.5 •Off-Market Trades: 0.03% of ₹25 whichever is higher

    Order Types

    The main Orders that all the broker platforms offer are CNC order (cash and carry), MIS order (margin intraday squareup), NRML order (normal margin). There four types of orders Cover orders provides additional margin and are placed  for an compulsory stop loss and this is a intraday position. The second one is the Bracket order where you lock in a profit by bracketing an order with two opposite side orders. This will help you get a higher margin and limit your loss.

    The third order is the after market order that are sent to exchange on the next day. The last one is GTC which are Good Till Cancelled order, which means you can buy or sell equity limit orders and your orders will remain in the system until its executed.

    Order Types 5paisa Zerodha
    CNC, MIS and NRML orders yes yes
    Cover order and Bracket order yes yes
    AMO-After Market Orders yes yes
    GTC-Good Till Cancelled yes yes

    Investment offering

    Investment offers contain Equity Derivatives (on both exchanges NSE/BSE), Commodity Trading (both brokers offers this on MCX), Online Mutual Fund Investment (offered on online mutual fund investment option) and Portfolio Management Services (both the brokers don’t offer this).

    Investment Offering 5paisa Zerodha
    Equity Cash and F&O yes yes
    Currency Deravitives and Commodity yes yes
    Mutual Funds and ETF yes yes
    Bond / NCD yes yes

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    The PROS and CONS of Zerodha

    PROS:

    • Free equity delivery traders. No brokerage charges for Cash-N-Carry orders.
    • Zero brokerage charges for delivery trading across segments and exchanges with a maximum brokerage of Rs 20.
    • Excellent trading platforms (KITE) available for free.
    • Easy and fast online account opening with simple and flat brokerage model in all other segments and exchanges BSE, NSE and MCX.
    • Over 10 lakh active customers and 10% of daily volume at BSE, NSE and MCX.
    • Zerodha Referral program offers 10% brokerage share to clients you refer.
    • Good Till Triggered (GTT) order are available which are similar to orders.
    The premium options offered by Zerodha
    The premium options offered by Zerodha

    CONS:

    • Doesn’t provide stock tips, research reports or recommendations.
    • Call and trade is charged at extra Rs50 order and auto square off is charged at extra Rs 50 order.
    • Doesn’t offer 3 in 1 account.
    • Doesn’t offer unlimited trading plans and AMC free demat account.

    The PROS and CONS of 5paisa

    PROS:

    • Flat fee brokerage. Pay just Rs 20 per executed order with no worries about the size of the trade.
    • Free trading software including 5paisa mobile app and trading terminal.
    • Up to 20 times exposure in intraday trading and 4 times more exposure.
    • 3.5 times more exposure in derivatives Intraday Trading.
    • It is the cheapest broker, flexible brokerage plans and research reports available but at an extra cost.
    The premium options offered 5paisa
    The premium options offered 5paisa

    CONS:

    • Call and trade is charged at Rs 100 per call in addition to the brokerage. Any number of trades can be placed in one call.
    • Research and advisory is available at extra cost.
    • Higher exchange turnover charges in comparison to other popular discount stock brokers.
    • Higher demat debit charges Rs 25 per transaction.
    • NRI trading and Demat account is not available.
    • Doesn’t offer commodity trading.

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    The premium services offered by zerodha and 5paisa

    Zerodha, being the biggest discount broker in India has over 22 lakh clients which is because of trust and brand value. Moreover, initiatives like educational facility (Varsity), investment in IPO’s from the same dashboard, free direct mutual fund investments, etc create more value for its clients.  Zerodha has got a bigger range of partner products that help traders and Investors like Streak, Sensibull, Learn app, etc.

    Whereas on the other hand, a few known advantages of 5Paisa over Zerodha is that they offer Research reports and robo-advisory to their clients, which Zerodha doesn’t have. However, this facility by 5Paisa is offered only to its clients with higher plans. In addition to that, the multiple flexible brokerage plans offered by 5Paisa can also be a little advantageous for volume traders.