How to Apply for an IPO Online

Initial Public Offering (IPO) is a procedure by which a privately owned company  issues shares publicly to generate funds. Some of the reasons why companies raise capital via an IPO include business expansion, paying off debts, and giving an escape route to early investors. In a company’s growth journey, an IPO is a significant milestone. The IPO application process can be completed through brokers, stock exchanges, and Self-Certified Syndicate Banks (SCSBs) using UPI and the Application Supported by Blocked Amount (ASBA) facility. This article explains how to apply for IPO, the eligibility process, and more.  

What are the Requirements for Applying for an IPO?  

To apply for an IPO, investors must meet a few basic requirements to ensure a smooth application process: 

• Demat account to receive allotted shares in electronic form 
• Trading account with a registered stockbroker to place the IPO application 
• Bank account linked with UPI or ASBA for blocking the application amount 
• PAN card for identity verification and regulatory compliance 
• Active UPI ID (for retail investors) to approve the payment mandate 

Meeting these requirements allows investors to apply for IPOs easily through online platforms and stock market trading apps. 

Know More - Check out Upcoming IPO at BlinkX 

Are there any Eligibility Criteria for the IPO Application? 

Before an investor considers investing in an IPO, they must meet certain qualifying conditions, such as: 

• An investor needs to be approved and eligible under the Securities and Exchange Board of India (SEBI) criteria. Four investors can participate in an IPO: employees, retail individual investors, non-institutional buyers (NIIs), and qualified institutional buyers (QIBs). 
• Investors must have a trading and Demat account with a recognised depository participant. 
• Investors must have a permanent account number (PAN). 
• Investors should link their Demat account to their savings account. 
• Their bank account should have enough funds to cover the IPO investment. 

How to Apply IPO Online  

Here is a detailed step-by-step guide on how to buy an initial public offering. 

Open Essential Accounts: To invest in an IPO, investors need to have three main accounts, namely: 

• Demat Account: This is the account in which the shares are held electronically. 
• Trading Account: Required to buy and sell shares. 
• Bank Account: Required for payment through the application supported by the blocked amount (ASBA) method. 

Company Research: Before submitting an IPO application, do comprehensive research on the financial health of the company, business model, and growth prospects. These would help investors analyse whether their investment is in line with their goals. 

Apply for the IPO: Investors can apply for an IPO through a brokerage platform or bank. When applying, they need to specify how many shares they want to buy and at what price. They need to make sure to do this before the application window closes. 

Wait for Allotment: Once the applications close, shares are allotted based on demand. In case of an oversubscription of the IPO, investors will get fewer shares than what they have applied for. 

Track Investment: Once allotted shares are credited to their Demat account, track them regularly. Investors should be ready for price movements and have a strategy in place regarding when to sell or hold their shares. 

After understanding how to apply IPO online, let’s understand how to bid for IPO through an ASBA.    

How to Apply for an IPO through ASBA?  

Applying for an IPO through Application Supported by Blocked Amount (ASBA) is a simple and secure process: 

• Log in to the bank’s net banking portal that supports ASBA 
• Select the IPO option under investments or services 
• Enter the IPO details, including bid price and quantity 
• Apply to block the required amount in the bank account 
• Funds remain blocked until allotment; debited only if shares are allotted 

ASBA ensures that the capital stays in the investor’s account while they apply for an IPO, making the process safe and convenient. 

How to Apply for an IPO through UPI? 

The technique of investing in an IPO using UPI is straightforward.  

Step 1: Log in to the trading account and choose the IPO to invest in. 

Step 2: Enter the price and quantity of shares. 

Step 3: Complete the application form and enter the UPI ID. 

Step 4: Approve the block funds request using the UPI app. 

After understanding how to buy initial public offering online, let’s understand how to apply for IPO offline.  

How to Apply for IPO Offline? 

Investors can apply for an IPO offline by following the steps below:  

• Collect a physical IPO application form from the broker, bank, or designated collection center.  
• Fill in the required details such as PAN, Demat account number, bid price, and quantity. 
• Choose the ASBA option and provide the bank account details. 
• Submit the completed form to the bank branch or broker. 
• The application amount is blocked in the bank account until allotment.  

This method is suitable for investors who prefer a traditional, non-digital IPO application process. After understanding how to purchase IPO, let’s understand the key points while applying for an IPO.  

Key Points to Remember While Applying for an IPO  

The following are the key points to consider while applying for an IPO.  

• Market Volatility: IPOs are affected more by market volatility than established companies. Fluctuations in the market can significantly affect a newly listed stock as they lead to price instability. 
• Regulatory Risks: Changes in regulations or the risk of non-compliance can pose regulatory risks. Companies face legal issues or stricter regulation, which adversely affects their operations and financial performance. 
• Lock-Up Periods: Generally, insiders such as executives, employees, or early investors cannot sell their shares during the lock-up periods. Once the lock-up period is completed, selling from insiders usually influences the stock price. 
• Business Risks: Public companies face various business-related risks, for instance, extremely competitive environments, technological disruptions, or supply chain disruptions. Assessing all these risks is important and that requires knowledge of the business model and the competitive position. 
• Lack of Historical Performance: The long operational and financial track record of most IPOs is not available. Hence, it is challenging to gauge the company's performance and credibility. 
• Investor Sentiment: Investor sentiment often influences the performance of an IPO. Speculation and hype can drive up the valuation, which can lead to corrections in price or the formation of a market bubble. 

Disclaimer: All investments are subject to market risks, economic conditions, regulatory changes, and other external factors. Returns are not guaranteed and may vary based on market performance and investment tenure. Investors should assess their risk tolerance and financial objectives, conduct their own research, and consult a qualified financial advisor before making any investment decisions. 

Conclusion 

Online IPO applications save time and are more convenient. It is up to investors to decide whether to use an online or offline mode of application. If they are looking to get involved in the latest market opportunities, knowing how to apply for new IPO online will enable them to participate in fresh offerings with ease. To begin their IPO process, they can work with a SEBI-authorised broker such as BlinkX. This stock market app will help investors with a simple and transparent application procedure. Diligent research is the key to getting the most out of the investment. Thoroughly investigate the firm before investing the capital.