How to Apply for IPO: Apply Online, ASBA and UPI

An initial public offering (IPO) refers to a private entity selling its stocks (shares) to the public for the first time. This allows the business enterprise to elevate capital, which is typically used to expand the business, settle debts, initiate new projects, and more. Simultaneously, it allows investors to buy stocks and turn out to be partial owners of the entity. Since IPOs allow people to acquire shares before they’re listed on the stock exchange, buyers can ideally buy shares at beneficial costs and anticipate potential returns in the future. However, many potential buyers may also find the IPO application process confusing, which could hinder timely investments in the available opportunities. Hence, Urban Money provides a detailed overview of how to apply for IPOs, how to invest in IPOs, how to buy IPOs, and more. Let’s scroll down.

How to Apply for an IPO?

Choose a Broker

To apply for IPOs, you need a demat account and a trading account with a registered stockbroker, along with an applicable bank account. Hence, do extensive research and locate the best dealer or brokerage firm that gives the service regards the Initial Public Offering (IPO).

Complete the KYC

KYC, Know Your Customer, is a process that refers to imparting your identity proof, address proof, and other pertinent documents which is inevitable to apply for IPOs. In general, you need to submit all these documents to your chosen broker.

Funding the Account

Transfer the appropriate funds into your trading account to buy stocks of the preferred enterprise. The required quantity may also vary from one IPO to another, so it is advisable to meticulously examine and make an informed decision.

Submit the Application

Fill out the application form as you discussed with your chosen broker. You can follow for IPO shares on the cut-off price or specify the charge you’re inclined to purchase the shares.

Temporarily Block Fund

The cash you intend to invest is temporarily set apart or “blocked” on your trading account. Once the allotment method is completed, the fund turns into unblocked.

Allotment or Refund

Following the allocation, the entity will expose what number of shares you have been granted at the price you cited in the application form. You can then use the unblocked funds to purchase the stocks; if not, the fund is refunded to your account.

Applying for an IPO with ASBA-how?

The following is the step-by-step procedure on how to invest in IPOs through ASBA (Application Supported by Blocked Amount):

Step 1

 Open a demat account and link it to your bank account

Step 2

Log in to your internet banking account

Step 3

Navigate to the “Demat Services” phase and tap the “New IPO” option.

Step 4

Choose the specific IPO that you desire to invest in.

Step 5

A short digital form will appear on your screen.

Step 6

Enter the relevant information on the digital form and click the “Submit” button. Make sure your demat account has enough budget; if not, transfer the required amount.

Step 7

Once you submit the digital application, you may review a request to accept the mandate request from the pertinent financial institution to block the fund temporarily for the IPO utility.

Step 8

Subsequently, you will get the confirmation message that your application has been successfully completed, along with the application number.

Step 9

Wait for the organization to announce the allotment repute, which normally takes somewhere between 2 to 6 days.

Step 10

Once the allotment is confirmed, the corresponding amount might be debited from your account, and the stocks will be credited to your Demat account.

Applying for an IPO through UPI—how?

The following is the step-by-step procedure of how to apply for IPOs via UPI (Unified Payment Interface):

Step 1

Open a Demat and trading account with a broker and link it to your bank account.

Step 2

Create a UPI ID using a UPI-enabled app like Google Pay, Paytm, BHIM, etc.

Step 3

Log in to your broker’s website and navigate the IPO section.

Step 4

Select the IPO you wish to apply for. Concurrently, a short digital form will be displayed.

Step 5

Fill in the required information, such as your PAN, name, quantity, and price. Enter your UPI ID as the payment option and submit your application.

Step 6

You’ll get a mandate request on your UPI app to block the applicable amount for the transaction to proceed.

Step 7

Wait for the company to declare the allotment status, usually taking place within a span of 2 to 6 days.

Step 8

Upon allotment, the funds will be deducted from your account, and the shares will be credited to your Demat account.

Accounts Required to Apply for IPO Online

Before mastering how to buy IPOs, it’s important to know about the specific types of accounts you need to have in order to apply for an IPO.

Demat Account

A Demat Account is an online account that holds your securities, consisting of shares, bonds, mutual funds, and so forth., in an electronic format. It permits you to trade and invest in the stock market without the want for physical certificates and office work. IPO shares, as soon as allotted, are ideally credited to your demat account.

Trading Account

A trading account is a web funding account that permits you to buy and sell securities inside the public market, which include stocks, bonds, commodities, foreign exchange, and plenty of others. It usually serves as an interface between your financial institution, demat account, and the inventory market, permitting you to behaviour transactions in the stock marketplace.

Bank Account

You can open a bank account with an applicable financial institution to deposit, withdraw, and transfer money. Specifically, you need to link your bank account with the trading and demat accounts to facilitate fund transfers for IPO investments.

Why invest in IPOs

As you learn how to apply for IPOs, let’s take a look at certain key benefits you could expect from making an investment in IPOs.

Early Access to Growth

Investing in an IPO enables you to get in on the floor ground of a young and budding company or organization. When an organization decides to promote its stocks to the public, it often has massive plans and innovative ideas that could lead to sizeable growth.

Increased Liquidity

Once an organisation goes public, its shares are traded at the stock exchange, presenting buyers with liquidity. This liquidity allows you to buy or sell shares without any interference, giving you the flexibility to adapt your investment strategy based on marketplace conditions or changes in your monetary goals.

Diversification of Portfolio

Including IPOs in your investment portfolio can be a strategic move for diversification. As you add new and potential stocks to your portfolio, you spread risk and increase the possibilities of achieving a balance between stability and growth.

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