What is an IPO Stock? How To Apply in IPO.
What is an IPO Stock? How to Apply in Ipo. All Details About Ipo Stock Read Full Details Given Below.
An
initial public offering (IPO) or stock market launch is a public
offering in which shares of a company are sold to institutional
investors, and usually also retail (individual) investors.
An
IPO is underwritten by one or more investment banks, who also arrange
for the shares to be listed on one or more stock exchanges. Through this
process, colloquially known as floating, or going public, a privately
held company is transformed into a public company. Initial public
offerings can be used to raise new equity capital for companies, to
monetize the investments of private shareholders such as company
founders or private equity investors, and to enable easy trading of
existing holdings or future capital raising by becoming publicly traded.
After
the IPO, shares are traded freely in the open market at what is known
as the free float. Stock exchanges stipulate a minimum free float both
in absolute terms (the total value as determined by the share price
multiplied by the number of shares sold to the public) and as a
proportion of the total share capital (i.e., the number of shares sold
to the public divided by the total shares outstanding). Although IPO
offers many benefits, there are also significant costs involved, chiefly
those associated with the process such as banking and legal fees, and
the ongoing requirement to disclose important and sometimes sensitive
information.
Details of the proposed offering are
disclosed to potential purchasers in the form of a lengthy document
known as a prospectus. Most companies undertake an IPO with the
assistance of an investment banking firm acting in the capacity of an
underwriter.
Underwriters provide several services,
including help with correctly assessing the value of shares (share
price) and establishing a public market for shares (initial sale).
Alternative methods such as the Dutch auction have also been explored
and applied for several IPOs.
How to invest in an IPO online?
An
initial public offering (IPO) is one way to buy shares of a company
that is going public. It is a popular mode of investment because it has
the potential to grow manifold in a short period of time.
Take
the case of Matrimony.com. When the company decided to go public, they
were oversubscribed 4.41 times, which means that there was over four
times the demand for shares that were issued by the company. This is not
uncommon as IPOs are an opportunity to make a quick buck. So, read on
to know how to invest in IPOs online.
Decision
The
first step is to choose the IPO that you wish to apply for. A great way
to decide is by going through the company’s prospectus. You can find
them on Securities and Exchange Board of India’s (SEBI’s) website.
The
prospectus gives a fair idea about the company’s business plan and its
purpose. Once you decide to invest in the particular company’s IPO, the
next step is to arrange for funds.
Funding
You can use your savings to invest in an IPO. But worry not if you don’t have sufficient funds in your account.
There
are a few banks and non-banking finance companies that are willing to
lend you money, at a certain interest rate. So, inquire about the
interest rates before you take a loan.
Demat-cum-trading account
A
demat account is a prerequisite to apply for an IPO. A demat account is
nothing but a facility to store your stocks and financial securities
electronically. A demat account can be opened by submitting your PAN
card, Aadhaar card, address and identity proofs.
Application process
You can apply for an IPO through your trading account or bank account. Some banks bunch trading, demat and bank accounts.
Once
you have activated your trading-cum-demat account, you need to be aware
of Application Supported by Blocked Amount (ASBA) facility, which is
compulsory for IPO applications. The ASBA is an application that
authorizes banks to block money in your bank account.
The
ASBA is available in physical and demat form. The facility eliminates
the use of demand drafts and cheques. All you need to do is to specify
your PAN, demat account number, bank account number and bidding details
in the application.
Bidding
You need to
bid while applying for shares, as per the lot size is mentioned in the
prospectus. Lot size is the minimum number of shares you have to apply
for during an IPO.
There is a bid price too. The
company usually sets a price band. The upper limit is known as the cap
price while the lowest is called floor price. You have to bid for shares
in this price range.
Although you can revise your bid
during an IPO, it is important to note that you will need to block the
money required while bidding. The blocked amount stays in the bank
account and earns interest till allotment.
Allotment
As mentioned before, demand may outstrip the actual number of shares issued in the market.
There
is a possibility that you may get fewer shares than you had asked for.
Sometimes, you might fail to get any at all. In these cases, the bank
will unlock your bid money (in part or full).
But
if you are lucky and get a full allotment, you would get a Confirmatory
Allotment Note (CAN) within six working days after closure of the IPO
process, also known as book-built issue.
Once the
shares are allotted, they will be credited to your demat account. The
next step is to wait for the listing of shares on stock exchanges, which
is done within seven days from the finalisation of issue.
applications
to its customers. Zerodha customers can apply in IPO using UPI (Unified
Payment Interface) through the Zerodha Console website. While the
process is not as easy as ASBA IPO application through the 3-in-1
account, the Zerodha UPI IPO application offers an option to Zerodha
customers to apply in IPO online.
Zerodha launched
Online IPO application services on Aug 6, 2019. Since then it becomes
the largest broker by the number of IPO applications being applied.
How to Apply IPO Through Zerodha?
Applying in IPO through Zerodha is simple and convenient. It's a 3 step process.
Create UPI ID on BHIM UPI app (One Time)
Apply on Zerodha Console using your UPI ID
Check mandate notification on the BHIM UPI app or net-banking app and approve with UPI PIN
Zerodha IPO Steps
Zerodha IPO application process (step by step guide) is described as below:
1) UPI ID Creation (One Time)
Zerodha
offers IPO applications through UPI as payment gateway. Read UPI for
IPO Application (Unified Payments Interface for IPO) for more detail.
Zerodha
customer first has to create a UPI ID, if they don't have one. UPI ID
can be created using BHIM UPI App or using the online mobile banking app
of any bank including ICICI, HDFC where you hold your account.
2) Apply in IPO using Zerodha Console
✓Login to Zerodha Kite Website and go to Console (Zerodha Back-office)
✓Go to Portfolio > IPOs
✓Select the IPO from the list and click Apply
✓Enter your UPI ID, quantity and price
✓Submit the application.
3) Accept the UPI Mandate
After
a few hours (usually the end of the day), you will receive a mandate
request on your UPI app (either BHIM or your net banking App)
Approve the standing instruction (mandate).
Zerodha IPO without UPI
You
can apply for an IPO without UPI. You can apply using the ASBA
net-banking services provided by your company and give your Zerodha
demat account number so that the allotted IPO shares are credited to
your account. We have detailed IPO application process for some major
banks here-
Zerodha IPO Charges
Zerodha IPO application service is free. Zerodha doesn't charge any fees from its customers for applying in an IPO.
Zerodha IPO Allotment Status
Zerodha
IPO status check can be done from the IPO registrar's website.
Registrar of the IPO (i.e. Karvy, Link Intime) is responsible for IPO
share allotment. They publish the allotment status on their website once
the share allotment process is complete.
You can also check the Zerodha IPO Allotment Status here on our website at IPO Allotment Status Page.
While
IPO allotment status is not available on the Zerodha website, you get
an alert from CDSL when IPO allocated shares are credited in your demat
account.
About Zerodha
Zerodha is India's
leading stockbroker offering online trading and investment services to
retail customers. Zerodha is a pioneer of the discount brokerage service
in India. Zerodha offers brokerage-free delivery trades and Mutual Fund
investments. For all other segments, they charge flat Rs 20 per
executed order, irrespective of the trade size. Click here to know more
about Zerodha and its services.
How to apply an IPO through Upstox?
Upstox
offers online IPO applications to its customers. The IPO applications
are offered using the UPI mechanism, in which only UPI is accepted as
payment options. Customers should have a UPI before applying for an IPO
with Upstox.
Upstox
is the 2nd largest discount stock broker in India. It offers online
trading at BSE, NSE, and MCX since 2012. It also offers Mutual Funds.
Upstox is famous for its discount brokerage plan (flat rate per trade
brokerage charges) and powerful trading software. The trading software
offered by upstox is built in-house. They are offered for free to all
its customers.
Upstox IPO Application
Upstox customers can apply in an IPO using 2 ways:
Upstox IPO Application (UPI Based)
Upstox
offers online IPO applications to its customers. Upstox customers can
apply in IPO's at BSE and NSE online using UPI as payment gateway.
Note:
Customers should have a UPI to apply in an IPO using Upstox.
The primary holder of the bank account (used in UPI) and demat account should be the same.
3rd
party IPO applications are not allowed. You cannot apply in an IPO on
your family members' demat account using your bank account's UPI. (You
could do this with ASBA application offered by few banks like SBI).
Net Banking IPO Application (ASBA Based)
If
you are an Upstox customer and do not wish to use Upstox IPO (UPI), you
have an option to invest through the ASBA facility offered by your
bank. Here are the steps to apply for IPO using ASBA net banking:
Visit the website of the bank and login to your account
✓Go to 'Invest in IPO' section of the website
✓With some banks, for the first time, you need to register as an applicant by providing your bank and demat account details.
✓Select the IPO you wish to invest
✓Choose the account and some of the details will be auto-populated
✓Enter details like the number of lots you wish to apply, price, etc.
✓Confirm and submit the application
✓Please note that the above process may differ slightly from bank to bank.
How to Apply in IPO with Upstox
Following are the steps to apply for IPO online using upstox:
✓Login to your Upstox pro trading website
✓Go to IPO section
✓Select the IPO you wish to apply
✓Enter your UPI ID
✓Submit the IPO bid.
Initial Public Offer (IPO)
Initial
Public Offer (IPO) is a process through which a privately held company
first time goes to the public to raise funds for its business needs and
get listed at the stock exchanges. This process results in to:
The company shares get listed at stock exchanges.
Stock market investors can start trading shares of the company on a day-to-day basis.
The company gets funds for future projects or to pay the debt.
Promoters who sell their own shares; get money.
Investors get the opportunity to buy the share of the companies in the early stage.
IPO
offers a great opportunity to buy shares of the company in the early
stage of its journey at stock exchanges. IPO shares usually have a huge
demand. Many IPO's get 100+ times bid for shares. In India, retail
investors have a reserved portion in an IPO. A fixed 35% IPO Shares are
reserved for retail investors. This reservation increases the chance of
allotment of IPO shares. Some retail investors use this to buy IPO
shares for listing gains only, instead of holding the shares for the
long-term.
How to Apply An Ipo Through Angel broking?
Angel
Broking is amount top 10 stock brokers in India offering retail
broking, investment and advisory services to stock market investors.
Angel started broking operations in 1987. As of Nov 2016, Angel has
presence in over 900 cities through around 8500 offices.
Angel broking has largest distribution network of stock broking and investment services in India.
Angel
offers Equity, Commodity and Currency Trading services. Angel also
offers services like IPO, Mutual Funds and Demat Account.
While
most of the Angel customers are offline customers trading though branch
offices or by calling, Angel Broking also offers sophisticated and
advance online trading platform for tech savvy customers.
Angel Broking also provides research, stock recommendations and in-depth analysis companies going public through IPO.
Online
IPO is one of the most popular offering of Angel Broking. Online IPO
provides customer the facility to conveniently apply for the IPO shares
without any paper work. Integrated with over 20 banks, the online IPO
offers ability to apply, modify and cancel IPO anytime when the IPO
shares available for bidding.
2 Easy ways to apply in IPO though Angel Broking.
Angel Broking customers can apply in IPO in 2 ways:
Online IPO Application (Website or Mobile App)
Angel
Broking customers can apply for IPO shares online though its trading
website or its mobile trading app. Online IPO Application is convenient,
easy and quick way of applying in IPO's at BSE and NSE. It takes less
than 1 minute to apply in IPO online. The online IPO application can be
modified or cancelled (when the IPO bidding is open) in just 1 click.
Offline IPO Application (Visit Angel Broking Branch)
Angel
clients can also visit any the branch office and apply in an IPO.
Customer applying offline in the branch has to fill a ASBA application
form and provide information like Bank Account Information, PAN Number
and Demat account information.
After successfully applying in an IPO, customer gets an acknowledge slip with a reference number.
How to Apply An Ipo Through Groww?
Groww
offers an online and paperless IPO application to its customers. Groww
customers can instantly apply in an IPO using UPI (Unified Payment
Interface) through the Groww website.
Groww
is a Bangalore-based online discount broker that provides low-cost
online trading and investment services to its customers. It started in
2016 as a direct mutual fund platform and is now expanding its services
to add other investment products to its product base to help customers
diversify their investments into multiple asset classes. Groww launched
online IPO application services in Sep 2020. The IPO section is made
available on the web as well as the app. However, the option to apply in
IPO is currently available only on the web.
Groww does
not provide any tips, recommendations, or advisory services. The
company has a dedicated section for IPO wherein it maintains the list,
details, and RHP of Groww open IPOs, Groww upcoming IPOs, and recently
closed IPOs.
Steps to apply for an IPO through Groww
Below are the steps to apply online in an IPO through the Groww website.
✓Login to Groww website and go to https://groww.in/ipo
✓Select the IPO from the list of open IPOs.
✓Enter the number of shares in the multiples of lot size.
✓Enter the bid price within the price range or tick on the cut-off price.
✓Click on Continue.
✓Enter your UPI ID.
✓Click on Submit Bid.
✓Open your UPI app and approve the payment request.
✓You can click on Status once the bid is submitted to track the progress of your order.
Key Features of Groww IPO application
IPO application option is available only on the Groww web version.
You can place up to three bids.
You can modify or cancel your application from the Status window till the IPO is open.
The
Status window provides the details of tentative IPO schedule dates like
allotment finalization, refund initiation, Demat transfer, and the
listing date.
You can also apply using your bank's ASBA
facility and Groww Demat account. It is also a fully online process
that can help you apply for an IPO in a few minutes.
Steps to Apply in an IPO using net banking ASBA
Below are the steps to apply online in an IPO through the Groww demat account and net-banking of your bank.
✓Visit your bank's website and Log in to your net-banking account.
✓Register yourself as an IPO applicant by entering your bank and Groww Demat details.
✓Visit the IPO section of the website that is generally under the Investments section.
✓Select the IPO you would like to apply for from the list of active IPOs.
✓Select your account and enter your details on the application page.
✓Confirm and apply.
In
the ASBA IPO application, the bank blocks the application amount from
withdrawal. The bank debits the money from your account on the allotment
of shares. If there's no allotment, the bank unblocks the money. The
money earns interest in the period.
The company will transfer the shares to your Groww Demat account on a successful allotment.
Groww IPO Charges
Groww
offers free online IPO application services to its customers. There are
no charges to apply for an IPO through the Groww trading platform.
Groww IPO Allotment Status
Groww
does not maintain IPO allotment status on its website. You can check
for the Groww IPO application allotment status from the IPO registrar's
website or on our website at IPO Allotment Status Page.
You
would receive an e-mail and SMS on your registered mail id and mobile
number informing you of the allotment status once the allotment process
finalizes.
In case of a successful allotment in an IPO,
you will receive the allotted shares in your Groww Demat account. The
bid amount that was blocked by the bank will also get debited. In case
you do not receive shares in the IPO allotment, the bid amount that was
blocked by the bank will get released.
Conclusion:-
Groww
offers an easy and convenient online IPO application using UPI as a
payment gateway. You can also apply using the ASBA facility. Groww does
not provide offline IPO application services. Currently, the IPO
application service is available only on the web. The company is working
on upgrading the app version for the said feature and is likely to be
launched soon.
