How to Apply for an IPO – Requirements and Details
What is an IPO?
IPO stands for Initial Public Offering. It’s a process by which any private limited company becomes a public limited company. Through an IPO a company gets listed in the stock market for the first time. Company offers IPO to trade their shares directly to the investors.
What are The Requirements to Apply for an IPO?
There are several basic requirements for investors before applying for any IPO:
2. You must have a Bank account linked to your demat account.
3. You must have a Permanent Account Number (PAN).
How to apply for an IPO?
There are three methods by which one can apply for an IPO:
• UPI application method
• ASBA method
1. UPI Application Method
UPI IPO application is provided by the stock brokers. To apply for an IPO via UPI application method, you must have an UPI ID. If you don’t have any UPI ID, just install BHIM app from google play store or iOS and create your UPI ID there.
Follow the below steps to apply for an IPO via UPI:
1. Login to your stock broker’s account using your demat account login credentials.
2. Click on ‘IPO’ and select the IPO you wish to apply from the current IPO list.
3. Enter the lot size, bid price etc.
4. Enter your UPI ID and Confirm the order.
5. Accept the mandate request by entering your UPI pin which you will receive shortly on your UPI App.
2. ASBA Method
ASBA stands for Application Supported by Blocked Amount. ASBA IPO application process is provided by the Bank through internet banking.
Follow the below steps to apply for an IPO using ABSA Method:
1. Login to your bank’s Internet Banking Account.
2. Click on ‘Apply IPO’ and select the IPO you wish to apply from the current IPO list.
3. Enter the applicant details and PAN.
4. Enter the lot size, bid price etc. and submit.
If you are not comfortable for an online IPO application, then you can choose to apply offline as well. Visit the nearest branch of you stock broker or bank. Fill the IPO application forms and provide the required details and submit the form.
What happens after submitting the IPO application?
After submitting the IPO application, required money for selected IPO will get freezed in your bank account via which you applied for the IPO.
• If you get full shares on IPO allotment, freezed amount will be deducted from your bank account and shares will get transferred to your Demat account.
• If you don’t get any share on IPO allotment, freezed amount will get released to your bank account.
• If you get partial shares on IPO allotment, those partial shares will get transferred to you Demat account and remaining freezed amount will get released to your bank account.
You can choose any of these methods to apply for an IPO. But online method is always suggested for this as online method is faster and more convenient than offline method. Check out the Current and Upcoming IPO and then apply.
Also Read: NRI IPO Investment in India