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How To Apply for Initial Public Offering (IPO)?
POs have many unique risks that make them different from the average stock which has been trading for a while.
IPO, or Initial Public Offering, is the sale of shares by a company to the public for the first time. Before an IPO, the company is considered private, when it goes public, it will issue IPO.
Until a company's stock is offered for sale to the public, the public can not invest in it.
Know how to apply for an IPO:
How to get the application?
If you want to issue an IPO, you need to obtain the application. You can get the application from;
- Syndicate member or the stock broker
- Collection centers
- Registrar to the issue (RTI)
- Self Certified Syndicate Bank (SCSB)
- Bankers to the issue
- Websites of the Stock Exchanges.
Fill the application form
Once the applicant gets the form, he or she has to fill it and remit the amount after calculating the number of shares applied. Along with the application for you will get an abridged offer document. You can get the full offer document from Company, SEBI or the websites of Company, Stock exchanges.
Details
Fill the document with following details:
- Status of the Applicant
- Name of the applicant
- Age of the applicant (age of the first holder, in case of application, is by joint holders)
- Depository participant name
- DP Account number
- Category of the investor
- Details of the payment (Cheque or Demand Draft number, Bank name) or Signing the undertaking authorizing the bank to mark lien of the funds
- PAN
- Signature of applicant
Note
File the document legibly without any crossing, corrections, and over-writing. You can strike off the non-applicable fields. 6 Best Investing Tips To Do In Your 30s
Payment
You have to make payment to the bank that is designated in the form as collecting center for that IPO. If you are making payment by Cheque/Demand Draft, don't forget to mention the application form number on the reverse of the draft/cheque. Do not make payment by cash/ postal order/money order.
Demat account
If you have a demat account, then you can apply for the shares directly through your demat account, or there is an option for physical delivery of share certificates.
Allotment of shares
The shares you applied will be allotted or unblock of the amount in your bank account (in case of ASBA applications) with in 12 working days. If payment is made by Cheque or Demand Draft, the registrar will dispatch the refund orders with in 12 working days.
Point to remember
The shares allotted will be available for sale only on or after 12th working day from the closure of the issue. Please do not sell the allotted shares before listing (generally, in case of Further Public Offering (FPO), investors sell shares before 12th working day and default in delivery). 6 Biggest Mistakes Stock Market Investors Makes
Source: SEBI
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