A phrase that is commonly used in the world of investment is ‘the company is going public'. What does this mean? ‘Going public' is the process where a private company raises capital from the people through an IPO or Initial Public Offering.
When a company is private, all of its shares are owned by its owners and other stakeholders. On the other hand, with an IPO, the company lists its shares on the stock exchanges so that people can invest in them. Interested investors apply for the shares of the company during the IPOs subscription period and wait for the allocation and listing.
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In this article, we will discuss how you can apply for an IPO online.
How To Apply For An IPO Online?
You can apply for an IPO online through your broker's portal or through the ASBA facility that is available with most banks. Let's go through each process.
How to Apply For An IPO Online Through A Broker
Here are the steps to apply for an IPO online through your stock broker:
Log in to your online trading account with your broker.
Navigate to the IPO tab and open the ‘Current/New IPO' section.
From the list of ongoing IPOs, choose the one you wish to invest in.
Fill in the number of shares you wish to bid for and add the bid price.
Enter your UPI ID or your bank details and submit the application.
The exchange will approve your bid.
That's it! If the shares are allotted to you, you will receive an intimation about the same on the date of allotment and the shares will be credited to your demat account. If you do not get the allotment, the bidding amount will be credited back to your bank account.
How to Apply For An IPO Online Through ASBA
Most banks offer the facility to apply for IPOs on their net banking portals using the Application Supported by Blocked Amount (ASBA) facility. Here are the steps for this process:
Visit your bank's net banking portal and log in using your user ID and password.
Navigate to the ASBA section and click on the ‘Apply IPO' option.
A list of ongoing IPOs will be displayed. Click on the one you wish to apply for.
On the application page, fill in the required details including the applicant's name, PAN number, bid quantity and bid price and click ‘Submit' to complete your application process.
What Accounts Do You Need To Apply For An IPO Online?
You will need the following types of accounts to apply for an IPO online:
Demat Account: It is mandatory to have a demat account to apply for an IPO as it is needed to store your shareholdings in an electronic form.
Bank Account: You will need this to make the payment for your IPO application.
Trading Account: You will have to open a trading account with your stockbroker to apply for an IPO and trade in stocks.
Wrapping Up
While you now know about the two ways to buy an IPO online, there are many other things you must know before you invest in an IPO. A lot of buzz is created in the market when a company launches its IPO. However, you must make sure that you study about the company, its operations, and financials thoroughly before you apply for the IPO. And ensure that you check all the details and fill the IPO application form properly.
Also Read: Latest IPO News
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