IPO Investment: Applying in Lots or as per Budget

An initial public offering (IPO) is the process by which a privately-held company raises capital by selling its shares to the public for the first time. In the context of the National Stock Exchange of India (NSE), an IPO refers to the process by which a company lists its shares on the NSE and makes them available for trading by the general public. The purpose of an IPO is to raise capital for the company and provide an exit opportunity for early investors and employees.

The amount for an IPO Bid

When an investor decides to participate in the IPO bid, they should keep a reserve of at least 35% of the IPO for the RII category. However, the maximum investment amount as an IPO is Rs. 2 lakhs.

Which Place is Best to Bid on?

Different share marketplaces are available in online stock marketing. The right type of IPO depends on a few factors like growth, trust, assured results, etc. 

IPO Lots Bid Option

Applying in IPO lots is a mandatory option. An investor can choose any random amount to invest in the share market.

An example will help you to explain briefly: 

  • Suppose the IPO price of a share is 200 Rupees.
  • The lot size is 100 shares. 
  • You will get your application amount: Rs. 100 X 200 = Rs. 20,000
  • An investor can apply for the IPO with the amount of Rs. 10,000, Rs. 15 000, 0r Rs. 30,000. 
  • For one lot, the pricing will be Rs. 20,000.
  • If an investor shows interest in buying 2 lots, it will be Rs. 40,000. For 3 lots, the pricing will be Rs. 60,000.

Online IPO Bid Process

The following steps are vital to make a bid as IPO:

  1. Submit the ID proof, address proof, and other important documents. 
  2. Create a Demat account with the help of a stockbroker. (Download the Shoonya App and open a free Demat account today)
  3. Should have sufficient money in your account
  4. Confirming that the IPO is open
  5. Follow the guidelines of ASBA and submit it. 
  6. Take part in 3 bids (at once) in an IPO at once. 
  7. Complete the Demat account number and bid on your desired stock. 
  8. An investor can get the details through the IPO application number.

Types of Investors in IPO

In an IPO, you will find 4 types of investors

  • Qualified Institutional Investors (QIIs) or Institutional Investors 
  • Anchor Investors
  • High Net Worth Individuals (HNIs) or Non-institutional Investors (NIIs) 
  • Retail Individual Investors (RIIs)

Define BSE IPO 

BSE is defined as the Bombay Stock Exchange. It explains the investors who focus on long-term IPO subscriptions based on different categories. 

BSE or NSE; Which one is a Better IPO?

It is difficult to say definitively which stock exchange is “better” for initial public offerings (IPOs) in India, as both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) have their own strengths and characteristics. The NSE is generally considered to be the more liquid and well-developed of the two exchanges, and it has a larger trading volume and a broader range of financial products. On the other hand, the BSE has a long history and a strong brand, and it may offer more personalized services to listed companies. Ultimately, the decision of which exchange to list on will depend on the specific needs and goals of the company going public.