An investor’s first steps into the stock market are simple: open a Demat account and a trading account. However, the investor can proceed in any direction from there because the options given by the stock market are limitless. IPOs are one such potential that many market participants are interested in.
What is an IPO?
IPO stands for Initial Public Offering. When a company wants to raise funds through the public, it has to become a public limited company. One can become a part of that company by buying its shares.
How to apply for an IPO online?
One can apply for an IPO online using the ASBA option offered by most banks or UPI. Here’s how to apply for an IPO online using both facilities:
How to apply for an IPO online through ASBA
You can apply on your bank’s website using the online ASBA facility- Application Supported by Blocked Amounts (ASBA). It’s typically found in net banking or e-services services.
Steps to apply for an IPO through ASBA-
- Access your net banking account by entering your customer ID and password.
- Select the Request tab from the menu.
- Scroll down until you see the IPO/Rights Issue option.
- The following screen displays a list of active IPOs and rights issues. Click ‘Apply’ for the IPO you want to apply for.
- The following screen will ask for some information from you. The number of shares you wish to bid on, your bid price, and your birth date.
Note- Pre-filled information includes your name, PAN number, bank account number and name, branch, nationality, and residential status. These specific details cannot be changed here.
- Following that, you will be requested to confirm the sum to be blocked from your bank account, agree to the appropriate terms and conditions, and submit the IPO application.
How to apply for an IPO via UPI
Steps to apply for an IPO through UPI-
- Log in to the trading account and choose the IPO you want to invest in.
- Enter the number of lots and the amount at which you want to apply for shares
- Complete the application form and enter your UPI ID.
- On the UPI app, approve the block money request.
Necessary Accounts to Apply for an IPO Online
- Bank Account – to process payments for the applied shares. This is accomplished using the ASBA facility.
- Demat Account – where the shares are held in an electronic form. One must have a Demat account to invest in an IPO.
- Trading Account – This is required to engage in an IPO online. This account can be opened with a brokerage business or a firm that offers stock trading services.
Remember that while corporations attempt to generate a sensation in the markets immediately before issuing an IPO, you must conduct thorough research on the company before investing.
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