How to Apply for an IPO?

How to Apply for an IPO?

Having a trading and demat account is the most fundamental requirement of investing in initial public offerings online. The process also necessitates you to submit the necessary documents, which include:

• PAN Card
• Aadhar Card
• Address proof
• Identity proof

 

Accounts Required to Apply for IPO Online

Besides these documents, you will also need the following to apply for an IPO:

• Demat Account: A Demat (Dematerialized) account is mandatory to hold the allotted shares in electronic form. You need to open a demat account with a depository participant (DP) like NSDL or CDSL.
• Trading Account: To apply for an IPO online, you need a trading account with a SEBI-registered stockbroker or online trading platform. This account facilitates the IPO application process.
• Bank Account: Investors and traders must have a bank account linked to a Demat account. This account will be used for payment during the IPO application and for receiving refunds, if any.
• UPI ID: Retail individual investors are required to have a Unified Payments Interface (UPI) ID linked to their bank account to make IPO payments seamlessly.
• ASBA Account (Optional): If you plan to apply for the IPO through the Application Supported by Blocked Amount (ASBA) process, you need to have a designated ASBA account with your bank.

If you have all these documents and accounts, you are eligible to apply for the IPO online. When applying, you have the convenience of choosing between the ASBA facility or your UPI ID.

 

How to Apply for an IPO through ASBA?

The primary benefit of investing through the ASBA facility is that the money in your bank account is temporarily blocked during the IPO process. If your application is rejected, the blocked amount is freed. Here are the steps to apply for an IPO in India through the Application Supported by Blocked Amount (ASBA) process:

• Step 1: You need to have a bank account designated as an ASBA account. Log in to this net banking account with your unique ID and password.
• Step 2: After logging in, go to the request tab. Now, scroll down till you find the IPO/Rights Issue section.
• Step 3: Here, You'll see a list of live rights issues and initial public offerings. To apply for an IPO, click the "Apply" button.
• Step 4: Accurately fill out the ASBA form with details like your PAN, Demat account number, bid quantity, and bid price. Ensure that you provide your ASBA account details.
• Step 5: The SCSB will block the bid amount in your ASBA account based on your application. The amount will remain blocked until allotment.
• Step 6: You will receive a confirmation from the SCSB/broker on the blocking of funds and submission of your IPO application.

 

How to Apply for an IPO through UPI?

To apply for an IPO through UPI, follow these steps:

• Step 01: Ensure you have a Demat account, a trading account, and a UPI ID linked to your bank account.
• Step 02: Log in to your trading account. Once logged in, choose the IPO you wish to apply for.
• Step 03: Choose the investor status as "Retail" and enter the bid quantity, price per share, and your UPI ID.
• Step 04: Select the bank linked to your UPI ID and click "GO" to proceed.
• Step 05: Read and accept the disclaimer to place the order.
• Step 06: Accept the UPI mandate request in the UPI app linked to your UPI ID.

 

Conclusion

With the introduction of digital trading platforms, investing in initial public offerings (IPOs) online has gotten easier. You can successfully traverse the IPO landscape by being aware of the eligibility requirements, documentation requirements, and application processes. Don't forget to read the prospectus carefully, assess the company's prospects, and only make investments that you can afford to lose.