Every business requires capital and it is only the quantum of said capital and the sources available to acquire it from that vary. One of the most popular ways of raising capital for companies is going public by way of an Initial Public Offering (IPO).
When a company decides to launch an IPO, it significantly widens its pool of potential investors and offers a chance for existing investors to quit their initial investment.
For the general public, new and upcoming IPOs are an effective way to become the shareholder of a particular company. In this article, we shall discuss the ways in which you can file your application for new and upcoming IPOs.
What is an IPO
An IPO is the first ever public issue of shares by a company. Launching an IPO is a significant step in a company becoming public and being listed on a stock exchange. When a privately held company announces its new upcoming IPO, you can check it in the latest IPO listings.
If you wish to gauge whether the new and upcoming IPO is worth investing in, you can go through the Draft Red Herring Prospectus for the issue and other important financial and operational information about the company.
An IPO is usually either a Fixed Price Issue (with a predetermined price for the shares on offer) or a Book Building Issue (with a price band for the shares on offer).
How To Apply For A New And Upcoming Ipo
With the application of technology, the process of applying for new and upcoming IPOs has become extremely convenient. You can directly apply for an IPO online through your bank account or demat account. There is also the option to apply for an IPO offline. Let us discuss all these application routes for new and upcoming IPOs.
Ipo Application Through Your Bank’s Internet Banking Platform
- Peruse the latest IPO listing and select an IPO to apply to. (You can skip this step if you get to know about an IPO through any other source, say, a newspaper advertisement).
- Evaluate the IPO issuing company and decide whether you should invest in it.
- Access your bank’s Internet Banking platform and locate the option for IPOs.
- Search for the selected IPO from the list of available IPOs.
- Enter the number of lots of shares you wish to apply for (IPO shares are offered in lots).
- Check all the details and submit your IPO application. The application amount shall be blocked in your bank savings account by way of Application Supported by Blocked Amount. This amount will be debited only if you get alloted shares in said IPO. If you do not get allotment of shares in the IPO, the blocked amount shall be unblocked.
Ipo Application Through Your Demat Account
Should you wish to apply for a new and upcoming IPO through your demat account, you can follow the steps mentioned below.
- Login to your demat account.
- Locate the option for IPO applications.
- Select the IPO you wish to submit an application for.
- Enter the required details, such as lot size and bid price (for book building issues).
- Verify all the particulars and submit your IPO application. The application amount shall be blocked in the linked bank savings account.
IPO Application Through The Offline Mode
If you wish to opt for the offline route of IPO applications, you can follow the below-mentioned steps.
- Visit a bank branch that offers the facility for offline IPO applications.
- Request a form for IPO application.
- Duly fill, sign, and submit the form (the details include your name, address, contact number, IPO name, lot size of shares applied for, bid price, Permanent Account Number, demat account number (for the credit of shares in case of allotment), etc.
- Submit a copy of your PAN card along with the form.
- The application amount shall be blocked in the bank account mentioned in the aforementioned application form.
The Bottomline
You can use any of the aforementioned ways to apply for new and upcoming IPOs. It is easier to opt for the online mode of IPO application owing to its relative speed and degree of effort required.
