Share Market News / How to apply for IPO, this is the step by step process

Share Market News: Nowadays many people want to invest in the stock market, and IPO (Initial Public Offering) is a great opportunity to invest in a company from the very beginning. Through IPO, you can buy shares of a company and expect good returns in the future. But many people do not understand how to invest in IPO. This process is not complicated, and you can easily apply for IPO from your mobile or computer sitting at home. Let us understand in simple and plain language what is IPO and how to apply for it.

What is IPO?

IPO i.e. Initial Public Offering happens when a company sells its shares to the public for the first time and gets listed in the stock market. When you apply for investment in the IPO of a company and you are allotted shares, you become a shareholder of that company. This is an opportunity where you can be among the early investors of the company.

Things to apply for IPO

You must have the following things before applying for IPO online:

Demat and trading account: You need to open this account on Zerodha, Groww, Upstox or any other brokerage platform.

Bank account: Your bank account must be UPI-enabled.

UPI ID: UPI ID will be required to block money while applying for IPO.

How to apply for IPO: Step-by-step process

Here is a simple process that you can follow to invest in IPO:

Log in to your demat account:

If you have created a demat account on Zerodha, Groww, Upstox or any other platform, log in to their app or website.

Go to IPO section:

After logging in, find the IPO section in the app or website. It is usually in the main menu or dashboard.

Select the company's IPO:

Select the company's IPO you wish to invest in from the list of currently open IPOs.

Click the Apply button:

After selecting the IPO, click the "Apply" button.

Fill in the lot size and bid price:

Lot size: Shares in an IPO are bought in a fixed number (lots). For example, if the lot size is 15, you must apply for at least 15 shares.

Bid price: Select your bid price from the price range provided by the company. It is usually better to choose a cut-off price, as it increases your chances of getting shares allotted.

Enter UPI ID:

Enter your UPI ID (such as Google Pay, PhonePe, or BHIM). This ID must be linked to your bank account.

Approve the mandate in the UPI app:

After applying for an IPO, a mandate request will appear in your UPI app. Approve it so that the required amount can be blocked in your bank account.

What happens after applying?

• Once your IPO application is submitted, wait till the IPO closing date.
• After the IPO closes, shares are allotted. If you are allotted shares, they will be transferred to your demat account.
• If you do not get shares, the blocked amount will be refunded to your bank account.

Some important tips

• Check the IPO details: Research the company's financial position, business model, and future plans.
• Pay attention to the lot size: Choose the lot size according to your budget.
• Approve the mandate on time: Failure to approve the UPI mandate on time may result in your application being rejected.
• Choose a cut-off price: If you are not sure what bid price to enter, choosing a cut-off price is a safe option.