How to Invest In an IPO? Step By Step guide on Initial Public Offering

How to Invest In an IPO

IPO – Process, How to buy IPO online, Risks and Returns

New to IPOs and wondering how to invest in the same? Keep scrolling the page and find out the step-by-step process to carry out the process successfully.

But before actually getting into the process, let’s discuss IPO in a bit of detail. An initial public offering (IPO) is the process of offering shares to the public in a new stock issuance.

It allows a company to raise capital from public investors. One should keep in mind that the transition from a private to a public company is an important time for private investors to realize gains from their investment. Meanwhile, it also allows public investors to participate in the offering.

There are plenty of IPOs are launched these days and a great no of IPOs coming in 2022, making it harder to take a wise decision. Curious to know more? Here’s the comprehensive guide to know about the step-by-step guide to make an investment in IPOs. Let’s get into it!!

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Must-Haves To Initiate the Investment Process

Before commencing the investment process, it’s essential to know what exactly you need to start. The applicants must have the following.

  • Trading Account
  • Demat Account
  • UPI ID
  • The mobile number that is linked to the bank account

IPO Investment Guide For Beginners: Step-by-Step Process

Since now you are aware of the IPOs and must-have documents to make an investment, let’s now check out the complete process here.

Step 1: Application Process

  • First of all, the investors need to log into a trading app or mobile application of the broker and go to ongoing IPO section.
  • Select investor type and IPO to apply for. Enter the number of shares and bid price. UPI id must be entered as well to continue the process.

Step 2: Blocking of Amount

  • Once you are done with the application submission after entering all the necessary details, mandate request is sent on the UPI application for approval.
  • The applicant must log into the UPI application and accept the mandate request.
  • Once it is accepted, the amount for IPO is blocked.

Step 3: Unblocking Debit/ Blocked Amount

  • The investors must note down the fact that upon allotment if no shares are allotted, the entire blocked amount is unblocked.
  • However, if there is a part allotment, the requisite amount is debited from the bank account and the remaining amount is unblocked.
  • Thereafter, the entire amount is debited if the applicant is allotted all the shares that were applied for and you are done.

Important Points To Note Down Before Investing In an IPO

It is mandatory to know keep the important factors in mind before investing in an Initial Public Offering (IPO).

  • The IPO application is most likely to get an allotment if it is made at the cut-off price.
  • Also, the IPO application of an investor can get rejected if the person is applying from a different bank account owned by someone else. It simply means that you can use only the bank account you own for making an investment in IPO.

The Bottom Line

This is all about an investment guide. We hope you have found it informative and will use the same whenever investing in an IPO. Since these investments involve a risk factor, make sure you take care of every important aspect before taking any crucial step. For more such updates, you can stay connected with us!!

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About the Author: Sami Memon

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