Article

Here’s all You Need to Know About IPO Application Process

22 Sep 2020

Initial Public Offering (IPO) is the first time issue of shares to the public and listing of stock exchanges. It can be a Fresh Issue of shares, Offer for Sale by existing shareholders or a mixture of both. Application for subscribing for a IPO can be done through both Online & Offline modes.

How to apply for IPOs online?

If you want to apply for an IPO, you need the below:

  • Demat account - To hold your shares
  • Trading account - To sell your shares
  • UPI ID - To block funds in your bank account

You can open demat account with any SEBI registered Depository Participant (DP). These DPs can be banks or brokers.

Here are the key steps to apply for an IPO online.

  • Login to your trading platform and select the desired issue (company) in the Current IPO section.
  • Enter the Number of lots and price at which you wish to apply for.
  • Enter your UPI ID and click on submit. With this your bid will be placed with the exchange.
  • You will receive a notification to block funds in your UPI app. Approve the block request.
  • Upon the successful approval, the required amount will be blocked in your bank account.
  • On allotment, the blocked amount will be deducted from your bank account and shares are credited into your Demat account. Any extra amount to the extent of shares applied but not allotted, will be unblocked by your bank.


How to apply for IPOs offline?

An offline application is made by submitting the filled-up application to the designated collection centre.

Fill in details like Name, PAN, Demat number, bid quantity, bid price and submit the ASBA application to the Self Certified Syndicate Banks (SCSB). The bank will upload the details of the application in the bidding platform. The onus is on you to ensure accurate details to avoid chances of rejection.

Tips for making money in IPOs:

  • For retail Investors, in case of over subscription, allotment is done on a lottery basis. So, it is advisable to apply from multiple family accounts instead of more lots from single account.
  • In order to increase allotment chance, instead of select a lower price, it is advisable to place the IPO bid price at cut off, which signifies that you are ready to buy the stock at final decided price.
  • Grey market premium (GMP) is the premium for which people are ready to pay for buying the shares before even stock is listed on the exchange. High GMP signifies higher demand in the market and hence can give more listing gains.

All the required details are available in the Red herring prospectus. You are advised to read the risk factors thoroughly before applying.

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Here’s all You Need to Know About IPO Application Process

22 Sep 2020

Initial Public Offering (IPO) is the first time issue of shares to the public and listing of stock exchanges. It can be a Fresh Issue of shares, Offer for Sale by existing shareholders or a mixture of both. Application for subscribing for a IPO can be done through both Online & Offline modes.

How to apply for IPOs online?

If you want to apply for an IPO, you need the below:

  • Demat account - To hold your shares
  • Trading account - To sell your shares
  • UPI ID - To block funds in your bank account

You can open demat account with any SEBI registered Depository Participant (DP). These DPs can be banks or brokers.

Here are the key steps to apply for an IPO online.

  • Login to your trading platform and select the desired issue (company) in the Current IPO section.
  • Enter the Number of lots and price at which you wish to apply for.
  • Enter your UPI ID and click on submit. With this your bid will be placed with the exchange.
  • You will receive a notification to block funds in your UPI app. Approve the block request.
  • Upon the successful approval, the required amount will be blocked in your bank account.
  • On allotment, the blocked amount will be deducted from your bank account and shares are credited into your Demat account. Any extra amount to the extent of shares applied but not allotted, will be unblocked by your bank.


How to apply for IPOs offline?

An offline application is made by submitting the filled-up application to the designated collection centre.

Fill in details like Name, PAN, Demat number, bid quantity, bid price and submit the ASBA application to the Self Certified Syndicate Banks (SCSB). The bank will upload the details of the application in the bidding platform. The onus is on you to ensure accurate details to avoid chances of rejection.

Tips for making money in IPOs:

  • For retail Investors, in case of over subscription, allotment is done on a lottery basis. So, it is advisable to apply from multiple family accounts instead of more lots from single account.
  • In order to increase allotment chance, instead of select a lower price, it is advisable to place the IPO bid price at cut off, which signifies that you are ready to buy the stock at final decided price.
  • Grey market premium (GMP) is the premium for which people are ready to pay for buying the shares before even stock is listed on the exchange. High GMP signifies higher demand in the market and hence can give more listing gains.

All the required details are available in the Red herring prospectus. You are advised to read the risk factors thoroughly before applying.