IPO Online Application Process in 2022| Motilal Oswal

Process for Applying an IPO Online

You may gain a lot from investing in an Initial Public Offering, given that IPOs have the potential to expand and bring in a lot of money quickly. However, you must first comprehend the IPO purchasing procedure carefully before investing. Therefore, over the course of this article, we aim to address every query about how to purchase an IPO and all associated questions so that you can make a calculated investment.

About IPO 

Initial Public Offering, or IPO, refers to the first time a company's shares are made available for purchase by the general public. For example, this method allows a privately owned corporation to become a public company. The two forms of IPOs are book-built offerings and fixed-price offerings. In a book-built offering, the share price may change depending on the bids made by the investors, as opposed to a fixed price offer where the share price is pre-set by the firm.

How To Apply For An IPO Online And Offline? 

Both online and offline applications are accepted for IPOs. To begin the process of applying for an IPO offline, you must submit a form to your IPO banker or broker. On the other hand, you must log in using the trading interface offered by your banker or broker when submitting an online application for an IPO. Since most of your information is immediately updated on the form via your Demat Account, the online technique is more straightforward than the offline way.

How Do You Apply For An IPO?

Now that you know the fundamentals of initial public offerings (IPOs), let's consider how to purchase an IPO.

  • Selecting The Ideal IPO: The first and most crucial stage is choosing the appropriate IPO. However, you must keep in mind that not all IPOs are successful. Therefore, be careful while deciding whether to invest in an IPO. Your choice is influenced by two key elements: personal factors and business factors.
  • Personal Factors:  Regarding your investing requirements, be precise. Your investing capacity and risk tolerance should be determined. Before making the IPO investment, take into account your long-term financial objectives.
  • Business Factors -  Obtain details on the business that is launching the IPO. Examine their prospectus thoroughly. See how the business has fared in the past and what its growth goals are.
  • Obtaining Funding: Before investing, it is essential to have your finances in order. To finance an IPO investment, you may either borrow money or utilise savings. Be cautious with the money you invest, however. IPOs carry a significant level of risk. You'll probably lose your money if the business experiences a loss.
  • Opening A Trading And Depository Account: While a trading account enables you to freely exchange shares, a Demat account keeps track of all electronic purchases you make. All you can do with a Demat account is purchase shares. To sell shares, you will also need a trading account. For streamlined processing, it is advised to create a trading and Demat account simultaneously.

Online Application Procedure For Buying IPO Shares

You may use your Demat or bank account to buy IPO shares. Some banks provide the option to create a trading, Demat, and bank account all under one umbrella. As a result, you may easily invest in IPOs after your trading and Demat accounts have been authorised. With ASBA, you may now purchase IPO shares without having to write checks or bank drafts. Application Supported by Blocked Account, or ASBA, is a method the SEBI established to make trading for potential IPO investors easier.

Banks are permitted under ASBA to restrict the use of funds in your account for stock purchases. From the day of application until the day of the allocation of shares, the money will be safeguarded. However, it is sometimes conceivable that you may get fewer shares than what you requested. In such a situation, just the sum for the allotted shares—and not the whole blocked amount—will be deducted from your account. For instance, you requested shares of Rs 1 lakh and were given shares of Rs 40,000 instead. Then your account will only be charged Rs 40,000.

Bidding And Distribution Of Shares

You must first put in a bid to purchase shares. Remember that you may only place a request for the lot size specified in the prospectus. The minimal number of shares you may bid for when submitting an IPO application is known as the lot size. You may only place bids within the price range that the firm establishes for the bid price. Keep in mind that you may always modify your offer. You will get a CAN, or Confirmatory Allotment Note, within six business days if you hit the jacket and obtain the entire allotment of shares.

The shares will be credited to your Demat account after they have been allotted. The next stage is to hold off on starting transactions until the firm is listed on the stock market. Start investing as soon as possible now that all of your inquiries about how to buy an IPO have been addressed. Open a Demat Account with Motilal Oswal right now to make sound investments!

Wrapping Up

You may now decide to invest in IPOs with knowledge of the IPO process's stages and significance. You will definitely need to put in a lot of effort to make wise financial judgments. This involves picking a dependable and trustworthy financial partner. You must choose a stockbroking company that offers a variety of advantages, such as user-friendly trading platforms, a single account for trading various types of investments, no fees for creating or maintaining Demat accounts, top-notch research, etc.

 

Related articles: 5 Tips for Investing In IPOs | What's the big deal about IPOs | Clearing the confusion from IPOs | IPO in India- The future looks bright

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