How to Apply for an IPO Online?

IPO Online

How to Apply for an IPO Online?

An initial public offering, sometimes known as an IPO, is the procedure for going public with a privately held business. When a business is private, its owner(s) or stakeholder(s) own all of the company’s shares (s). When the owner(s) of the business decides to go public, they apply to list their firm on stock markets like the BSE or NSE. They also offer investors the chance to subscribe for a portion of their shares. During the subscription period, investors make IPO investments as they wait for the listing. They benefit if the listing is at a premium, and vice versa.

Who doesn’t like IPOs?

In the financial markets, IPOs are the closest equivalent to an India-Pakistan cricket match. Each IPO in the market is surrounded by a lot of buzzes. This is due to the possibility of investors receiving extremely high profits from IPOs. But the following query is: How do you submit an IPO application? Bidding for an IPO follows a slightly different process. Although you can submit an online application for an IPO, keep in mind that you cannot place an IPO order through your broker. You must place the order using the ASBA option offered by your bank.

What is required to submit an IPO application?

Demat account: – A Demat account is required to invest in initial public offerings (IPOs). After allotment, your shares will be kept in this location.

Trading Account: – Before submitting an online IPO application, you must have a trading account. Any SEBI-certified Depository Participant, like 5paisa, will allow you to register a trading account.

UPI Id: – You can either generate a UPI Id through the BHIM app or use an existing UPI Id already associated with your bank account

Bank Account: – To pay for the applied shares, you need a bank account. Previously, the bank account was debited for the sum bid for the shares. The remaining cash would then be credited later, depending on the number of shares allotted; this took time. To make the payment process simpler, SEBI created ASBA or Application Supported by Blocked Amounts. Depending on how many shares you bid for, a specific sum of money is blocked by ASBA. If you receive fewer shares than you bid for, the remaining funds will be released from blockage after the cash is debited from your bank following the allotment.

ASBA: – The Application Supported by Blocked Amount (ASBA) method of applying for IPOs is quick and simple. The money is frozen in your account for the IPO when you invest through ASBA. Your bank account will only be debited if you get IPO shares. You can also get interested in these monies throughout this time. It is also important to note that ASBA has been designated a requirement for IPO bidding by the Securities and Exchange Board of India (SEBI).

Applying for an IPO Online

There are two methods to apply for initial public offerings online: through internet banking or brokers. Let’s examine each in more depth. 

Online IPO Application Process – Using a Broker

To simply apply for an IPO through a broker, follow the procedures below:

  1. Sign in to your broker’s online account. You must register using your email and phone number if you don’t already have an online account.
  2. Go to the current IPO area by finding the IPO tab. From the current IPO list, choose the IPO’s name.
  3. Type in the number of stocks or the lot size that you wish to bid on. Choose the bid price as well. Bidding at the cutoff price or the highest price at the top of the price range will boost your chances of getting an IPO allotment. 
  4. In the following step, enter your UPI ID and click the Submit button. Your UPI app will need to authorize the transaction before the exchange can accept your bid.
  5. Watch for the UPI app to notify you of the obligation. Up to the IPO allocation date, the application money will still be frozen.

Applying for an IPO Online Using Internet Banking

Use Internet Banking to apply for an IPO by following the steps listed below:

  1. Use your login credentials to access your Internet Banking account.
  2. Look for and choose the ASBA (Application Supported by Blocked Amount) tab.
  3. Select the IPO from the list of IPOs by clicking on the “Apply IPO” option.
  4. Type the PAN and applicant name. Additionally, specify the price and bid quantity before clicking “Submit.” The bid will be approved the same day if it is submitted before 2 PM on a work day. However, if you submit your offer after 2:00 PM, it will be considered the next day.

Conclusion

You may apply for an IPO more quickly and conveniently online. You may, however, select an offline or online application option of your choice. To begin your IPO adventure, pick a broker that has SEBI authorization. Your application will be processed smoothly and openly with the assistance of these brokers. Before investing your money, study stock market courses and do extensive research on the firm to ensure you will get the best return on your investment. As you can see from this article, applying for IPOs is simple. So the next time you come across a great IPO and decide to invest, just follow the instructions above and get started!

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