Table of content

IPO Application – Apply for IPO

Table of content

How to apply for an IPO online?

The massive success of recent IPOs like Electronics Mart (43.14%), Campus Active (29.66%), and Global Health (23.71%) etc. has fuelled retail interest in applying for IPOs in anticipation of listing gains. But before you apply for an IPO, it is important for you to understand the basics of an IPO, the various types of IPOs you can apply for and finally how to apply for an IPO online. Yes, gone are the days when you had to wait in line with your broker or bank to process your IPO application. With the growth of online share trading and the introduction of ASBA (application supported by blocked amount), you can now apply for an IPO from the comfort of your home, in a hassle-free manner.

What is an IPO?

An initial public offering or IPO is the process through which a company sells its shares to the general public for the first time. With an IPO, a company gets listed on the stock exchange and is available for trading to the common public. It is also an excellent opportunity for prospective investors to become the shareholders of a hitherto privately held company.

IPOs can be of two types - fixed price issue and book building issue. In a fixed price issue, the share price is predetermined by the listing company and the lead managers of the issue. On the other hand, in case of a book building issue, a price band (range) is provided to investors, who can apply at a price they deem fit (between the price band). The application amount is blocked in your bank account courtesy the ASBA facility and in case you do not get allotment, the money is unblocked and available for your use.

Prerequisites to applying for an IPO

  • Demat account:

    The first requirement for applying for an IPO is that you must have a Demat account. This is because the allotted shares are in digital form. Hence you will need a Demat account to store the allotted digital shares. Opening a demat account should, thus, be on the top of your 'how to apply for an IPO' checklist.
  • Trading account:

    A Demat account only holds the shares allotted during an IPO. You will not be able to trade these shares without a trading account. Hence, opening a trading account is important if you want to trade the shares allotted during an IPO.
  • Bank account:

    Another prerequisite of applying for an IPO is having a bank account. The application amount for your IPO bid gets 'marked on hold' in your bank account courtesy ASBA. This facility has made the process of IPO investing seamless. It is only after the allotment of shares is complete that the money gets deducted from your bank account. In case you do not get allotment, the amount is unblocked for your use.
  • UPI ID:

    The best way to apply for an IPO is via UPI id. The process is complete within minutes with minimal formalities.
  • Eligibility criteria:

    Knowing the eligibility criteria can help you leverage and increase your chances for an allotment. For example, in most of the IPOs, 20% reservation is maintained for retail investors (whose total bid value is less than ₹2 lakhs). So, if you want to qualify for the retail quota, then you must ensure that your total bid value (price *lots or quantities) is less than ₹2 lakhs. This way you can avoid competing with big buyers like qualified institutional buyers, non-institutional buyers etc. for allotment.

What are the benefits of applying for an IPO online?

  • Saves time:

    By choosing to apply for an IPO online, you can save a significant amount of time, which is otherwise spent on physical documentation and visit to the broker.
  • Seamless process:

    The process to apply for an IPO online is user-friendly and hassle-free. All you have to do is follow a few easy steps and make the payment online.
  • Optimal use of funds:

    By using the ASBA facility, you can continue earning interest on the blocked application amount. This is because the application amount is only marked on hold in your bank account and not debited till the allotment of the shares. Hence you do not lose out on any interest income.
  • Safety and transparency:

    When you apply for an IPO online, the entire process is safe and highly transparent. There are various checks to ensure that your application and money remain secure.

How to apply for an IPO through m.Stock's mobile app or website?

  • Visit our website or download our mobile application
  • Open m.Stock Zero Brokerage account and complete your account opening formalities
  • Log in to your account and click on IPO section under the menu tab
  • Select the IPO you want to apply for
  • Enter the number of shares and your bid price
  • Check your IPO application and proceed to the payment tab
  • Select the mode of payment as UPI
  • Enter your UPI ID and generate OTP
  • Enter the OTP and that’s it! Your IPO application process is complete.

Now that we have discussed how to apply for an IPO online and the various benefits it offers, the next step for you to take is to open a Zero Brokerage account with m.Stock, where you get much more than just IPOs. Yes, with m.Stock Zero brokerage account, you can trade free for life across products - IPOs, equity delivery, intraday, futures and options , currencies etc. So, open your m.Stock account now!

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