What do you need to apply for an IPO?
To apply for an IPO, you typically need the following:
Demat account: A Demat (Dematerialised) account is essential for holding shares in electronic form.
PAN card: A Permanent Account Number (PAN) card issued by the Income Tax Department of India is mandatory for investing in securities.
Bank account: A bank account linked to your Demat account for the transfer of funds.
Trading account: A trading account with a registered stockbroker to facilitate the buying and selling of shares.
How to apply for IPO online - Through broker
Applying for an IPO online through a broker allows you to place bids conveniently using your trading and bank account. The process is digital, time-efficient, and enables you to track your application and allotment status with ease.
- Log in to your broker's online account. If you do not have an account, register using your email and phone number.
- Find the IPO tab and go to the current IPO section. Choose the IPO you want from the list.
- Enter the number of shares (lot size) you want to bid for and select your bid price. To improve your chances of getting shares, consider bidding at the cut-off price or the highest price in the price range.
- Enter your UPI ID and click the submit button. You will need to approve the transaction in your UPI app.
- Wait for a notification in your UPI app. The money for your application will be blocked until the IPO allotment date.
How to apply for an IPO using ASBA?
ASBA (Application Supported by Blocked Amount) is a convenient and secure method of applying for IPOs directly through your bank account. Here is how to apply:
- Ensure you have a Demat account: It must be linked to your bank account for seamless processing.
- Access net banking: Log in to your bank’s internet banking platform and find the IPO section.
- Choose the IPO: Select from the list of open IPOs. It is advisable to research the company beforehand.
- Fill in the application form: Enter details such as the number of shares, your PAN, and Demat account number.
- Submit the application: Once verified, submit the form. The application amount will be blocked in your account—not debited—until the allotment.
- Check the allotment: After allotment, if you receive the shares, the amount will be deducted. If not, the funds are unblocked.
ASBA ensures your money remains in your account until the shares are actually allotted, offering both transparency and convenience.
How to apply for an IPO using UPI?
Applying for an IPO through UPI (Unified Payments Interface) is a fast and efficient method, especially suited for retail investors. Follow these steps:
- Open and link a Demat account: Your Demat account should be linked to your bank account.
- Log into your trading platform: Use your broker’s online or app-based platform to access IPO applications.
- Select the IPO: Choose the IPO you want to invest in after evaluating its details and financials.
- Fill in the application form: Enter the number of shares and personal details as required.
- Provide your UPI ID: Make sure the UPI ID is correct and linked to your bank account.
- Approve the mandate: A request will appear in your UPI app to block the funds. Approve it to confirm your application.
- Track the allotment: You can check the status online to see if the shares have been allotted.
This process ensures quick, paperless, and secure IPO applications, with funds only deducted if the shares are allocated.
How to apply Offline
If you prefer not to apply online, you can opt for the offline method:
- Visit a branch of your bank or brokerage firm.
- Fill out the ASBA application form and provide your KYC details.
- Your funds will be blocked in your bank account. Once shares are allotted, the corresponding amount will be debited from your account.
Both online and offline methods have their advantages and cater to the preferences of different investors. Choose the one that suits you good based on convenience and ease of access.
Why should you invest in IPOs?
Investing in IPOs can offer several advantages:
Potential for high returns: IPOs of promising companies often experience significant price appreciation in the initial days of trading.
Opportunity to invest early: IPOs provide investors with a chance to invest in companies during their early stages of growth.
Diversification: Adding IPOs to your investment portfolio can help diversify risk and potentially enhance overall returns.
Plan Your Investments: Upcoming ipos in india
How do you invest in IPO shares?
Investing in IPO shares involves the following steps:
Research: Conduct thorough research on the company's business model, financial performance, industry trends, and future prospects.
Assess risk: Evaluate the risks associated with investing in the IPO, including market volatility and company-specific risks.
Apply for IPO: Once you have identified a suitable IPO, you can apply for shares through your broker or online through internet banking.
Allotment: After the IPO subscription period closes, the allotment process begins, and shares are allocated to successful applicants.
Listing and trading: Upon allotment, the shares are listed on the stock exchange, and investors can begin trading them in the secondary market.
Is there any eligibility criteria for IPO application?
To invest in an Initial Public Offering (IPO), you must meet the following eligibility criteria:
- SEBI approval: You must be an approved investor category as per SEBI guidelines. This includes:
- Qualified Institutional Buyers (QIBs)
- Non-Institutional Investors (NIIs)
- Retail Individual Investors
- Employees
- Demat and trading account: You need to have a Demat and trading account with a recognized Depository Participant (DP) like 5paisa..
- PAN card: A Permanent Account Number (PAN) is mandatory for all investors.
- Linked bank account: Your bank account must be linked to your Demat account to facilitate the transfer of funds.
- Sufficient funds: Ensure you have sufficient funds in your bank account to cover the IPO application. The amount will be blocked until the allotment process is completed. If you are allotted shares, the funds will be transferred to the company. If not, the blocked amount will be released.
Accounts required to apply for an IPO online
To apply for an IPO online, investors need to have a Demat account, a trading account, and access to internet banking services provided by their bank.
What are the benefits of online IPO application?
Time-saving: No need to visit the broker's office or bank, saving valuable time.
Convenience: The process is seamless and can be completed from anywhere, offering greater ease.
Interest on funds: If the application is made through a savings account, the amount remains in the account and continues earning interest until the IPO allotment date.
Transparency and control: The online process is transparent, allowing you full authority and control over the application.
Conclusion
Investing in IPOs can be a rewarding opportunity for investors to participate in the growth journey of promising companies. By understanding the process of applying for an IPO online and the necessary requirements, investors can make informed decisions and capitalise on the potential benefits offered by IPO investments in the Indian securities market.
Related Articles:
What are the Different Types of IPO
How is an IPO Valued
What is IPO Allotment Process
How to Check your IPO Allotment Status
