How to buy and sell IPO online in India?

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Some of the key reasons for the rise in the number of investors registering for an IPO include increased awareness of its benefits, a straightforward application procedure, pricing transparency, and the possibility of assisting in fulfilling long-term goals. Once the firm is listed, you can sell or keep the IPO shares to meet your long-term objectives. However, if you decide to sell your IPO shares, you must carefully consider and plan for it. Read the post to learn how to buy and sell IPO. But, before we go any further, let us quickly review the fundamentals.

What is an IPO?

An IPO, or Initial Public Offering, is the process by which a business becomes public and generates funds from the public by selling its shares. When a corporation becomes public, it becomes more accountable and regulated. Furthermore, it promotes the company's expansion and development. The IPO process begins with the firm picking an underwriter and stock exchanges where its shares can be publicly issued.

There are two sorts of markets the main market and the secondary market. IPO shares are listed on the main market, whilst NSE and BSE shares are traded on the secondary market. Once an IPO is launched, the shares issued in the primary market are moved to the secondary market and traded like regular securities.

 

How to buy an IPO online or offline?

The IPO can be purchased either online or offline. The method for how to buy and sell IPO is below:

  • To apply for the IPO, you can receive a physical form from a broker or a bank office, or you can do it online using your Demat Account.
  • Complete the form with all the data about the number of lots you wish to apply for, the bank account, the Demat account, the total investment amount, and so on.
  • The shares will be distributed to you within 10 days after the offer's close date. In the event of an over-subscription, you may be given shares proportionally.

Process of IPO in India 

The following is a complete approach for raising funds through an IPO:

  1. The first stage is for firms to register with SEBI, which manages IPOs.
  2. The firm's next step is to submit the documentation to SEBI. They will review the paperwork and, once satisfied, will authorise them.
  3. While SEBI clearance is pending, the business should draft a prospectus.
  4. Once SEBI gives the go-ahead, the business should announce the number of shares it intends to issue and decide the share price.
  5. There are two sorts of IPO issues:
    • Fixed-price IPOs and book-building IPOs. The corporation needs to pick between the two.
    • Fixed Price IPO is an IPO in which the price of the shares to be offered is predetermined.
    • A book-building IPO is when the business sets a price range and bidding occurs within that range.
  6. The shares are made public once the firm has decided on an IPO type. Anyone interested in applying can do so. After receiving the public's subscription, the corporation would make the allotment.
  7. Following the allotment, the corporation lists its shares on the stock market. Once issued in the main market, the shares are placed on the secondary market and available for regular trading.

When to sell IPO Shares? 

Another key topic that comes to mind is when you think about how to buy and sell IPO shares. Selling IPO shares is completely dependent on your financial goals. However, before selling, you should understand how much profit you will gain when you sell and exit the market, regardless of the chosen selling technique.

Investors typically sell their shares on the first day of an IPO since the prices are higher than at the end of the previous year. Simply put, there is no ideal moment to sell IPO shares because each investor's financial goals vary. Another thing you should know is that trading on a listing day begins at 10:00 a.m., as opposed to 09:15 a.m. on ordinary days. So all you need to do is adopt the proper selling strategy at the right moment to leave the market profitably. 

Conclusion

Overall we covered how to buy and sell IPO. IPO is a procedure in which a private business goes public, allowing investors to become a part of a firm with strong growth potential at an early stage. Because the future is unpredictable, having an exit strategy, even for an IPO, is essential before placing your orders. The preceding ideas will help you prepare your exit strategy, and you may tailor them to your financial goals. Once you've decided on your investing strategy, create a Demat account with the reliable stock market app.


 

FAQs on How to Buy and Sell IPO

Yes, a normal person can buy an IPO by participating through a brokerage account.

Buying an IPO on the first day is subjective; it can be profitable or risky, as stock prices may fluctuate.

IPOs can be a potential profit or loss; it depends on the company's performance and market conditions.

The minimum investment in an IPO varies depending on the company and the exchange.

A lot typically represents 100 shares, but it can vary depending on the company and the stock exchange.

The number of lots one can buy in an IPO depends on the individual's financial capacity and the rules set by the issuing company and exchange.


 

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