An IPO is an allotment of shares to the public by a private company for the first time. Buying shares from an IPO has become very simple with online bidding and net-banking. Investing in IPOs can be very profitable if you make sound choices based on analysis of the company’s prospects. This article is a guide on how to bid for shares of an IPO online.
Key Points
- To bid online, you need a demat account and a PAN card.
- Enter in the 16 digit depository participant ID provided to you by Upstox (the brokerage) and bid for the amount of shares you want to buy.
- Fill in the details as required and submit your application.
- After the shares are allotted, they are automatically deposited in your Upstox demat account.
How to apply for IPO Online?
To bid online, you need
- Demat account
- PAN card
You can open an online demat account or understand the online demat account opening process if need be.
To bid, make sure the IPO is open to you, the retail investor. This is what you have to do to buy shares online:
- Visit the website of the bank or the Depository Participant that provides for making application for the IPO.
- You must be a client of the bank or the Depository Participant to bid for shares.
- Enter in the 16 digit depository participant ID provided to you by Upstox (the brokerage) and bid for the amount of shares you want to buy. Fill in the details as required and submit your application.
- The bank sets aside the money for the bid through ASBA (Application Supported by Blocked Amount) system. You can't access the blocked amount which is transferred to the company after it allots you shares or is refunded back after the IPO closes if shares aren't allotted to you.
- After the shares are allotted, they are automatically deposited in your Upstox demat account.
Why should you bid online?
There are plenty of reasons you’d want to skip the offline paperwork intensive process:
- Bidding online for an IPO is a hassle free and simple process that takes a few minutes at most.
- Shares are allocated and credited automatically to your demat account.
- All of your share holdings can be viewed at one place by logging into your Upstox account.
Wrapping Up
- An IPO is an auction of shares by a private company for the first time.
- You can buy shares from an IPO either online or offline.
- Upstox offers free delivery trading with shares from an IPO, that is, delivery trading at zero brokerage cost.
- For online bidding, log into your bank account and enter the 16 digit ID provided by Upstox (your brokerage).
- Bid for shares and submit application.
- Shares are automatically credited to your demat account.