Investing in Initial Public Offerings (IPOs) is an exciting opportunity to become an early investor in a company’s shares. With the convenience of a Demat account, the process of investing in an IPO has become more streamlined and accessible. Here’s a step-by-step guide on how to invest in an IPO using a Demat account:
Before you proceed to invest in an IPO, ensure that you are eligible to do so. Different IPOs may have specific eligibility criteria based on factors such as citizenship, residency, and investment amount. Check more on what is demat account?
Open a Demat Account:
If you don’t have a Demat account, you’ll need to open one with a registered Depository Participant (DP). The Demat account is essential for holding and managing the shares you receive upon successful allotment in the IPO.
Research and Select the IPO:
Thoroughly research the upcoming IPOs in the market. Evaluate factors such as the company’s financial performance, growth prospects, industry trends, and the purpose of raising funds through the IPO. Based on your research, choose the IPO that aligns with your investment goals. Check more on what is demat account?
Apply for the IPO:
Once you’ve selected the IPO you want to invest in, you can apply for it using your Demat account. There are two primary ways to apply:
Online Method: Most Demat account providers offer an online platform where you can apply for IPOs. Log in to your account, navigate to the IPO section, select the IPO you want to invest in, and provide the necessary details, including the bid price and quantity of shares you wish to apply for. Check more on what is demat account?
ASBA (Application Supported by Blocked Amount): This is a common method used to apply for IPOs. You can submit your bid through your bank’s net banking platform using the ASBA facility. The bid amount is blocked in your bank account, and upon allotment, the required funds are debited from your account.
Fill the Application Form:
If you’re applying through the online method provided by your Demat account provider, you’ll need to fill out the online application form with accurate details. Make sure to enter the bid price and quantity correctly. Check more on what is demat account?
Once you’ve filled the application form and reviewed the details, submit the application. You’ll receive a confirmation of the submitted application.
Application Revision and Modification:
Before the IPO closing date, you can revise or modify your application, including changing the bid price or the quantity of shares you’re applying for. Check more on what is demat account?
Application Status and Allotment:
After the IPO closes, you can check the status of your application through your Demat account or the IPO registrar’s website. If your application is successful, you’ll be allotted the shares according to the quantity and bid price you specified.
Crediting Shares to Demat Account:
Upon allotment, the shares will be credited to your Demat account. You can view your allotted shares and manage them through your Demat account’s online platform. Check more on what is demat account?