Step-By-Step Guide On How To Apply For an IPO Online

An Initial public offering (IPO) is a process whereby a company goes public by issuing its shares to the public with an aim to raise funds. Investors usually keep close track of IPO announcements as the public issue gives them the chance to buy shares of a company for the first time. In an IPO, a private company lists its shares on a bourse, making them available for purchase by the general public.

As of November 6, 2023, the total number of IPOs this year already breached last year's tally with ASK Automotive becoming the 43rd IPO of the year.

When a company launches an IPO, it announces a subscription period. During this period, investors invest in the IPO and wait for the IPO listing. If the IPO shares get listed higher than the offer price they are said to be listed at a premium, and this turns out to be profitable for investors who had subscribed to the issue.

Things that are prerequisites to apply for an IPO:

Demat Account- You can invest in an IPO if you have a Demat account. This is your demat account is the place where your shares will be stored after share allotment by the company.

Trading Account- It is essential to have a trading account before applying for a public issue.

UPI Id - You can either use an existing UPI Id linked to your bank account or generate a UPI Id at the BHIM app.

Bank Account- You should have a bank account to pay the shares applied. Earlier, the bidding amount for the shares was debited from the bank account.

Eligibility Criteria For IPO Application?

1. You should be an approved investor as per SEBI guidelines. At present, four types of investors can invest in an IPO - Qualified Institutional Buyer (QIB), Non-Institutional Buyer (NII), Retail Individual Investor, and Employees.
2. You need to have a Demat and a trading account with any recognized Depository Participant in India.
3. You must have PAN.
4. Your bank savings or current account should be linked to the Demat account.
5. There should be sufficient credit balance in your bank account to fund the application.

Applying Online For IPO - Through Broker

Follow the below-listed steps to apply for an IPO through a broker:

1. Login to your online account with the broker. If you do not have an online account, you are required to register with your email id and phone number and create an account.
2. Search for the IPO tab and visit the current IPO section. Choose the IPO name from the current IPO list.
3. Submit the lot size or the number of shares you want to place bids for. Also, select the bid price. It is advisable to place your bids at the cut-off price or the maximum price at the upper end of the price band if you want to increase the chances of IPO allotment.
4. Enter your UPI ID in the next step and click the submit button. You will be asked to approve the transaction on your UPI app, and the exchange will approve your bid.
5. You will receive the notification in the UPI app. The application money will stay blocked until the IPO allotment date.

Applying Online for IPO - Through Internet Banking

1. Log in to the Internet Banking account with your login ID and password.
2. Locate the ASBA (Application Supported by Blocked Amount) tab and click on it.
3. Click on the 'Apply IPO' tab and choose the IPO from the IPO list.
4. Fill the applicant's name and PAN. Also, enter the bid quantity and price and click on submit.