IPO (Initial Public Offer) is when a company goes public so that people can subscribe to its shares. The reason that a company leans towards raising funds through an IPO merely depends on the objectives of the company. Many of us don’t know how to invest in an IPO which is so normal with the increase in new factors that are used for growing the economy or finance.
IPOs are one such opportunity that inventors in the market are interested in. Today, this article is going to be a helping hand for beginners where we will discus show to invest in an IPO and what upcoming IPO you can watch out for.
Requirement for applying for an IPO
To invest in an IPO it is mandatory to have a Demat Account as your shares are stored in an electronic form on it. Also, a trading account would be needed which you can open with the help of a brokerage firm or a company in a stock trading facility.
Steps on how to invest in an IPO
IPOs can be risky and speculative investments but it gives an opportunity to the investing public to own and participate in the growth of the company.
Let’s see what are the ways to invest in an IPO
Step 1: Application Process
The steps are simple for the application as you have to Log in to your trading account and choose the IPO you want to invest in and bid on them with the no of shares.
Step 2: Bidding
The investor has to bid a price for the IPO from the price range that the company has decided. You can either go for the floor price (the lowest price) or the cap price (the highest price). And once you lock the bid with no. of shares, your bank will freeze the total amount until the allotment is done.
Step 3: Allotment
This is the last step where you have to wait and see if you have been allotted the share by the company or not. There are chances that you get fewer shares than you demanded or no shares at all or the whole no.of shares you wanted. It totally depends on the secondary market. So whatever no.of shares you get the bank will deduct that amount and unblock the difference amount.
So how to invest in an IPO seems easy when you know which IPO to choose.
Upcoming IPOs to look out
Watch out for these upcoming IPOs if you are interested in investing:
| Company Name | Security Type | Issue Start Date | Issue End Date |
| Annapurna Swadisht Limited | SME | September 15, 2022 | September 19, 2022 |
| U Gro Capital Limited | DEBT | September 5, 2022 | September 22, 2022 |
| Indiabulls Housing Finance Limited | DEBT | September 5, 2022 | September 22, 2022 |
Points to keep in mind when you apply for an upcoming IPO
- If your IPO application is in a different name from the bank name used for payment then it may get rejected. So make sure you do the payment from your bank account only and not from someone else.
- If the IPO application is made at the cut-off price, you will most likely receive the allotments.