How to Apply for an IPO Online

How to Apply for an IPO Online

Starting and running a business is not easy. Even if you have successfully managed your cash inflow and plan execution, there may come a point when you will want additional funding, whether for business development or diversification. While there are choices for bringing in an angel investor or a professional loan from a bank, these paths are not always in the borrower's best interests.

Many firms choose for an Initial Public Offering (IPO) in such cases. IPOs have been increasingly popular recently, with several firms launching them.

However, as an investor, you may not know how to apply for an IPO. If you are in the same boat, let us discover the solutions in this post. 

What are the Requirements for Applying for an IPO? 

Here are some requirements for applying for an IPO:

  1. Demat Account: To invest in IPOs, you must first open a Demat account. This is where your shares will be kept following allotment. 
  2. Trading Account: You must have a trading account before applying for an IPO  online. You can create a trading account with any SEBI-certified Depository Participant, including BlinkX. 
  3. UPI ID: You can utilise an existing UPI ID connected to your bank account or generate a new one using the BHIM app. 
  4. Bank Account: You will need a bank account to pay for the shares you have applied for. Previously, the money bid for the shares was deducted from the bank account. The remaining cash would then be credited based on the number of shares allotted; this was time-consuming. To streamline the payment process, SEBI created ASBA (Application Supported by Blocked Amounts). A particular amount of money is blocked through ASBA based on the number of shares bid for. After the allotment, cash is deducted from your bank account, and if you receive fewer shares than you bid for, the remaining amount is unblocked.

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Table of Content

  1. What are the Requirements for Applying for an IPO? 
  2. How to Apply for an IPO Online
  3. How to Apply for an IPO through ASBA?
  4. How to Apply for an IPO through UPI? 
  5. How to Apply for an IPO Offline?
  6. Are there any Eligibility Criteria for the IPO Application?

How to Apply for an IPO Online

There are two methods to apply for an IPO online: through brokers like BlinkX or internet banking. Let's go over each other in depth. 

How to Apply For an IPO Online through Broker

Follow the steps mentioned below to apply for an IPO conveniently through a broker:

Step 1:  Access your online broker account. If you don't already have an online account, you may establish one by registering using your email and phone number.

Step 2: Find the IPO tab and navigate to the current IPO section. Choose an IPO name from the current IPO list. 

Step 3: Enter the lot size or the number of stocks you wish to bid on. Also, choose the bid price. If you want to enhance your chances of getting an IPO allocation, bid at the cut-off or maximum price at the top end of the price range. 

Step 4: Enter your UPI ID in the following step and press the submit button. The exchange will approve your bid when you authorize the transaction using your UPI app.

Step 5: Watch for the mandate notice in the UPI app. The application funds will be frozen until the IPO allotment date.   

How to Apply for an IPO Online through Internet Banking

Follow the procedures outlined below to apply for an IPO easily using Internet Banking:

Step 1. Log in to your Internet Banking account using your login ID and password. 

Step 2. Find the ASBA (Application Supported by Blocked Amount) tab and click on it. 

Step 3. Click on the 'Apply IPO' option and choose an IPO from the list.

Step 4. Enter the applicant's name and PAN. Also, input the bid quantity and price, and then click the submit button. If you place your bid before 2 PM on a work day, it will be accepted the same day. However, if you put your bid after 2 PM, it will be scheduled for the next day.

How to Apply for an IPO through ASBA?

ASBA stands for "Application Supported by Blocked Amounts." You can apply for an IPO on your bank's website using the online ASBA service. In addition, the ASBA function is commonly seen in e-services or net banking services.

Here are the processes to apply for an IPO using HDFC's net banking ASBA facility. The processes are more or less the same across financial systems;

  • Step 1: Log in to your internet banking account with your customer ID and password.
  • Step 2: Select the request tab on the left side of the screen.
  • Step 3: Scroll down to the IPO/Rights Issue option. 
  • Step 4: The following screen will provide a live list of IPOs and rights offerings. Click 'Apply' for the IPO you wish to apply for.
  • Step 5: The next screen will seek some information from you. The number of shares you wish to bid on, your bid price, and your date of birth. 

Some information, such as your name, PAN, bank account number and name, branch, nationality, and residency status, will be pre-populated. This information cannot be changed here if necessary. The information requested under Depository Details can also be accessed on your Consolidated Account Statement (CAS).

  • Step 6: Once you proceed, you will be asked to confirm the amount that will be blocked from your account, agree to relevant terms and conditions, and submit the IPO application.

How to Apply for an IPO through UPI? 

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

Step 1: Log in to your trading account and choose which IPO you wish to invest in.

Step 2: Enter the price and quantity of shares you wish to apply for.

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

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

Step 5: It'll be finished.

How to Apply for an IPO Offline?

If you are not comfortable applying for an IPO online, you can submit your application in person at the local branch of the brokerage business or bank. First, you must fill out an ASBA application and supply the necessary KYC information. After that, your money will be frozen, and the amount invested will be deducted after the shares are awarded. For example, if you invested 3 lakh and received 1 lakh in shares, your bank account would be charged just once. 

Are there any Eligibility Criteria for the IPO Application?

Before you consider investing in an IPO, you must meet certain qualifying conditions, such as:

  • You must be an approved and eligible investor 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).
  • You must have a trading and Demat account with a recognized depository participant.
  • You must have a permanent account number (PAN).
  • You should link your Demat account to your checking or savings account.
  • Your bank account should have enough funds to cover the IPO investment.

Online IPO applications save time and are more convenient. It is up to you to decide whether to use an online or offline mode of application. To begin your IPO adventure, work with a SEBI-authorised broker such as BlinkX. This stock market app will assist you with a simple and transparent application procedure. investigate is the key to getting the most out of your investment, therefore thoroughly investigate the firm before investing your money. 

FAQs on How to Apply for an IPO

Some banks (such as SBI, Axis, BoB, IndusInd, and RBL) provide 3rd party IPO apps, which allow you to apply for an IPO with multiple bank accounts.

Yes, ASBA is necessary for all IPO applications and investors in general.

If you want to invest in a new firm, you must be willing to take on a high level of risk, as shares may be volatile during the first few months after the IPO. 

Yes, a beginner may file for an IPO. It has become simple to invest in an initial public offering. Whether you choose to invest online or offline, follow the steps above to ensure that you have all you need. Once completed, you will be able to proceed with the IPO investment. 

No, you cannot sell an initial public offering on its listing day. Trading begins when the market opens. As a result, you can sell your shares after the trading session begins, rather than before it.