IPO Subscription Status - Details & How to Check
Lately, IPOs have become a celebrated and rewarding investment option that every passionate investor wishes to participate in. The craze for Initial Public Offering is nothing but impressive, considering their potential to provide high returns.
Every investor who has spent money in this investment avenue is familiar with the value of an initial public offering as they get an opportunity to become a significant part of a successful business. While people are spreading their successful and unsuccessful public offering stories all around, one question remains: how to subscribe to an IPO?
While the process might be slightly different from other investment options, it is pretty simple and can be quickly finished in a few minutes. With this article, let’s find out what is IPO subscription and how you can subscribe for one.
What should you know before subscribing to an IPO?
Before you move ahead to learn about IPO subscription, here are a few important things you must know about:
Before you apply for an initial public offering, you must have a trading account and a PAN card. It is an online investment account that lets traders buy securities and track trades. Generally, traders use this account to buy and sell their equity shares in the stock market.
Adequate Analysis and Research Skills
Before you apply for an IPO, you must know how to research properly and find out the details of the company you want to invest in. You must also be aware of how to differentiate tips from rumors, so you don’t end up stuck in a pit. You will have to study the company briefly and decide afterwards.
You must also be able to find out the plans and goals of the company, the revenue it has generated, its loss and profit figures, the flow of investment, and more relevant information.
What is IPO subscription data?
It refers to the number of shares applied for in a given IPO. It indicates the demand among the general public. This data is tracked distinctly for every investor category, such as non-institutional, institutional, retail, and more. You can find it in real-time on a stock exchange’s website.
Subscribing for an IPO
A majority of broking firms provide two straightforward methods to help you subscribe for an IPO. They are as mentioned below:
Applying for an IPO Online
If you are registered on a broking service’s website, such as Upstox, you can easily use their trading site or app to apply for an IPO. By doing so, you complete the procedure easily and quickly. Plus, the online method is the preferable way, as per a lot of investors.
With the help of an online IPO application, you can decrease time and complete the process within a few minutes, as your data will get directly uploaded from your trading or Demat account.
Applying for an IPO Offline
If you don’t want to take the online method, you can subscribe to the company’s stakes offline by visiting your nearest bank’s branch or the broking firm’s branch. With this, you will have to fill up the Application Supported by Blocked Amount (ASBA) application and give KYC details.
This method helps you apply for a specific number of shares based on the funds and share price. When you invest money in ASBA, your funds’ application gets blocked from the bank account. The invested amount gets debited if you have bought the shares and have been allotted the same.
For instance, if you invested Rs. 1 lakh and got the share allotment worth Rs. 50,000, only Rs. 50,000 will get debited from your account, and the rest of the amount will be unblocked.
Why should you track the status of your IPO subscription?
Simply put, IPO subscription is referred to the number of times a company’s IPO is subscribed at the stock exchanges, be it NSE or BSE. Throughout the process of subscription, the figures continue to change. Thus, you can track the details of the final bidding on the last day of the process.
Generally, in an initial public offering, you can find three to five categories of investors, such as:
- Qualified Institutional Buyer (QIB)
- Non-Institutional Bidders (NII)
- Retail individual investors
- Others (anchor investors)
Knowing the status of your IPO subscription is crucial when you are applying for it. With this, you can achieve a variety of benefits, such as:
- Understanding the demand for IPO in the market and forecasting the listing price (the higher the demand for the IPO, the better will be the listing price)
- Analyze the figure for retail participation to decide whether you should invest in the company after the listing
- Decide the next step based on the allotment status of the IPO. Those who received the allotment will have to wait until the listing to stay invested or sell the investment. Those who didn’t get the allotment can use their unblocked money for something else.
- An IPO’s grey market rates are also dependable on the subscription data
How to check IPO subscription status?
You can visit the BSE website to check the IPO subscription status and discover additional details. If not, you can also visit brokerage platforms and newspapers that publish such statuses regularly. Follow these steps to track the status:
- Open the official website of BSE IPO subscription status
- Find the Issue Type option and choose Equity (if you want, you can also choose debt investments)
- Choose the name of the IPO and click on the drop-down menu to get the IPO list
- Enter the application number and find it in the acknowledgement receipt that you had received from the bank or the stock exchange
- Put in your PAN number
- You will get a tab stating I am not a robot; click on the box available beside and click Search
- The screen will showcase your IPO subscription status and the number of shares that you got
Frequently Asked Questions (FAQs)
Q. What is an IPO?
It is the abbreviation for Initial Public Offering, wherein a private firm decides to go public and raise funds for the growth of its business by selling shares to common people.
Q. How many methods are there to subscribe for an IPO?
There are only two methods to subscribe for an IPO: the online and offline methods.
Q. Is subscribing for an IPO through the online method fast and safe?
Yes, if you are subscribing for an IPO through the online mode, it will be faster and safer. You can easily visit your broker’s site and register for the IPO through your mobile without wasting hours altogether.
Q. Does IPO guarantee high returns?
There is no guarantee of high returns. However, you might get good returns if you invest in a well-known company that can grow the business manifolds. Thus, before you invest in an IPO, you must conduct profound research to understand the company’s reliability.
Q. Is ASBA compulsory to get IPO?
Yes, ASBA is compulsory if you wish to subscribe to an IPO as it has to offer the ASBA application in the form of a payment mode.
Q. What does an IPO subscription mean?
IPO subscription is referred to the number of times an IPO has been subscribed. If the company is famous and its IPO is the talk of the town, this number could be higher than the anticipation.
Q. What is the benefit of subscribing to an IPO?
There is a variety of benefits of subscribing to an initial public offering. One of the important benefits is that you can sell and buy stocks anytime, thus making investments extremely liquid. Small retail investors can also get an adequate opportunity to invest in the IPO. Moreover, the IPO market is professional and safe; thus, it safeguards retail investors.
Q. What is the minimum subscription for IPO?
According to the mandate of the Securities and Exchange Board of India (SEBI), each company should have a minimum subscription of 90% of the issued amount on the closure date.
Q. What happens if IPO is fully subscribed?
If an IPO subscription status shows that it is fully subscribed, it averts a firm from having any remaining shares that were not sold after they went public. Or else, the company had to decrease the price of the stakes for the investors to purchase.