Benefits of applying for an upcoming Initial Public Offering (IPO)
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IPO is Initial Public Offering (IPO) when the shares of a privately owned company are made available for sale to the public for the first time. It is a medium for companies to raise money for their various business operations or business expansion. Investors buy shares directly from the issuer company at the time of IPO through bidding. Post the initial offering, the shares get listed in the secondary market (stock exchange) and can be traded by the investors.
How to invest in IPOs
With Bajaj Financial Securities Limited, you can apply in IPOs using your UPI ID. Here are the steps to invest in IPOs
- 1 Visit our Bajaj Finserv Securities website to view the companies with an open IPO
- 2 Click on 'Apply Online'
- 3 Enter your PAN card number and mobile number to proceed
- 4 If you have an account with BFSL, all details will be pre-filled. Just select the lot size and enter UPI ID
- 5 Submit your application
- 6 Open your UPI app and approve the block mandate request. The amount applied in the IPO will be blocked in your bank account
- It is mandatory to approve the block mandate else your IPO application will get rejected
- In some cases, there may be some delay in the request to appear on your UPI app
Frequently asked questions
The full form of IPO is Initial Public Offering. In IPO, a private company sells its shares to the general public for the first time to raise capital for its various business operations or expansion.
Yes, you need a demat account to apply for IPO. Demat account stores the shares you buy in a digital format. You need to enter the client ID and Depository Participant ID (DPID) of the demat account while applying for IPO.
The lot size refers to the pre-defined quantity of shares that investors have to invest in an IPO. For instance, if an IPO has a lot size of 30, you can apply for 30, 60, 90, 120 (and so on) shares.
One may get a lesser number of shares than applied for in case the shares get oversubscribed. If that happens, the blocked amount in the bank account will be debited to the extent of shares allotted, and the rest will be unblocked. In case of no allotment, the total amount will be unblocked.
The allotted shares will be deposited to your demat account that has been mentioned in the IPO application form.
FPO is Follow-on Public Offer. Contrary to IPO, FPO is issued by a company already listed in the stock exchange to raise capital through the issue of new shares for public subscription.
The issue price is the price of each equity share in the IPO. There are two variants of the IPOs: book building IPO and fixed price IPO. In a book building IPO, investors are given a price range to bid within. In fixed price IPO, the issuer company fixes the price per share, and investors can only buy shares at that price.