Investing in an IPO is a must for all investors. It allows you to spot great opportunities, and experience massive growth.
These small companies have the potential to grow into giants in their industry. Once you have spotted a promising investment, you need to learn how to buy it.
This article will take you through the process of investing in an IPO.
Things You Need
- Demat Account
- Trading Account
- Bank Account
- Mobile Number
- UPI ID
Log onto your trading account, and go to the IPO section. Once you have gone through the list of IPOs, choose the one you want to invest in, and click ‘buy’.
Many types of IPOs have a minimum amount that you need to buy. An example is a minimum of 100, and you can only buy in multiples of 100.
When purchasing an IPO, you need to enter your UPI ID, and also the price. IPOs usually have a price range. An example would be 100-105 RS per share. Once you put in your order, the amount is blocked in your bank account.
For an IPO, there is no guarantee that your order will be accepted, as there are thousands of other investors bidding as well. To increase your chances of being accepted, you should bid the maximum price, and how many ever shares you want.
Upon allotment of shares, the entire amount of purchase is unblocked. The amount is then transferred to the exchange, and you will receive your shares soon after.
Sometimes, there can be a partial allotment. Then, only the amount required will be removed from your account, and the rest will be unblocked and returned to you.
If no shares are allotted to you, no amount of money is debited from your account.
Sometimes, the IPO can be rejected because they cannot verify your details. One particular instance is when the bank account used for the purchase of shares is not owned by the trading account’s owner.
If you have any further questions about IPOs, it is recommended to talk to your stock broker, as they can give you specific guidelines based on your trading account.
