How to Apply for an IPO?

An Initial Public Offering is the first step for companies to get listed on the stock exchanges and secure a spot in the secondary market. Applying an IPO is the first step to secure the shares in that IPO lets understand better how to apply for IPO and the benefits of IPO.

How to Apply for an IPO?

To apply for an IPO, you need to have an active demat and trading account with a SEBI-registered stockbroker for holding and selling shares and a funded bank account to make the mandate for blocking of funds for the UPI/ASBA process. With the help of your stockbroker, you can check the current and upcoming IPOs in the market, and you can apply if you find an IPO that seems interesting to you.

How to Apply for an IPO Online?

Applying for an IPO online is very easy nowadays. With the help of technology, you can simply apply for an IPO via ASBA and UPI by following the steps below.

Applying IPO Online via ASBA:

Applying for the IPO via ASBA(Application Supported by Blocked Amount) through net banking from your registered bank account is very simple if you follow the steps below.

Step 1: Log in to your Bank’s “Net Banking portal”.

Step 2: Head to the IPO application page.

Step 3: Click on “Apply IPO” in the IPO application page.

Step 4: Select the IPO from the drop-down menu.

Step 5: Enter the Bid details like “LOT SIZE & PRICE”.

Step 6: Click on the “Submit” option to complete the Bidding process.

Before applying via ASBA, make sure your demat account is linked to the Bank account to avoid interruptions.

Apply IPO Online via UPI:

Applying the IPO via UPI is a very user-friendly option for retail investors, they can apply by using their daily UPI apps.

Step 1: Log in to your ”Demat Account”.

Step 2: Head to the IPO application page.

Step 3: Click on “Apply IPO” in the IPO application page.

Step 4: Select the IPO from the drop-down menu.

Step 5: Enter the Bid details like “LOT SIZE & PRICE”.

Step 6: Enter the UPI ID of the registered bank account for blocking the funds.

Step 7: Click on the “Submit” option to confirm the bid.

Step 8: Once you confirm the bid, you will receive the mandate link to the UPI ID to approve the mandate before the closing time of the IPO. 

Before applying via UPI, make sure your demat account is linked to the Bank account to avoid interruptions.

How to Apply for an IPO Offline?

Applying the IPO in the offline method is a traditional method that was used in the early 2000s. Even if you want to apply for the IPOs in the Offline Method, you can apply by following the steps below.

Step 1: Download the IPO Application form from the Broker/Bank/Exchange(NSE/BSE).

Step 2: Fill the required Details like DP ID, Bank details, Bid details, etc...

Step 3: Submit the Form to your Broker/Bank.

Step 4: The Bank/Broker will block the funds for the Mandate.

Step 5: Once the mandate is done, you will receive confirmation of the mandate.

Document Required for Applying for IPO

Particularly for applying for an IPO, you don’t require any mandatory documents for opening a Demat account; you need the documents mentioned below for identity verification and address verification 

Identity Proof:

• PAN card
• Voter ID
• Driving License
• Passport
• Aadhaar Card

Address Proof: 

• Voter ID Card
• Driving License
• Aadhaar Card
• Passport
• Ration Card
• Utility bill 

Eligibility Criteria for IPO Application

To invest in an Initial Public Offering (IPO), there are certain criteria as mentioned below

SEBI Approved Investor: You must be in the category of investors for which SEBI approves bidding for the IPO, such as

• Qualified Institutional Buyers (QIBs)
• Non-Institutional Investors (NIIs)
• Retail Individual Investors (HNI, BHNI)
• Employees

Demat and trading account: You need to have a Demat and trading account with a SEBI-registered stockbroker.

Funds: You have sufficient funds in your bank account to cover the IPO application. The Funds will be blocked until the completion of the IPO allotment process. If you are allotted shares, the funds will be debited. If not, the amount will be released.

Benefits of Online IPO Application

Applying for IPO via online comes with a lot of benefits, such as you no longer have to wait for the confirmation of IPO bidding as compared to the traditional process (Offline). 

• Time Saving: The Online IPO application will reduce the time of applying for IPO
• Reduces Human Errors: In the Offline IPO process, there might be a chance of getting an error in entering the data. The Online IPO Process removes these errors by automatically fetching the data.
• Transparency: Online IPO gives more transparency than the offline IPO, where you can track your entire IPO status directly from your mobile.

Conclusion

Applying for an IPO can be a rewarding experience for investors looking to participate in a company's Book Building Process with the help of ASBA and UPI, the process has become significantly simpler, faster, and more transparent. By understanding process investors can confidently able to apply IPO gets benefiteted from the growth of new companies entering the secondary market.

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