Steps to Apply for Upcoming IPOs
Your IPO application commences from the point of deciding that you want to apply
for the IPO after reading through the prospectus. You will have to start off with
choosing whether you want to invest online or offline. That is the first step.
STEP 1Choosing between Offline and online investing
The IPO application for any book built issue can be either made offline by filling
up a physical form and submitting to the broker or the banker or online through
your online trading account. Actual online IPO applications are a lot more convenient
because data pertaining to your account is automatically downloaded from your DP
master data and the online application process for IPOs is a lot simpler and more
efficient. This also reduces the chances of errors.
STEP 2Ensure that your bank account is adequately funded
Whether you apply for the IPO via ASBA or through non-ASBA, you need to ensure that
your bank account is adequately funded. The only difference in ASBA is that the
amount gets blocked. In both the cases, if there are insufficient funds in the bank
account then the application gets rejected outright.
STEP 3At what price to bid for the Book Built IPO?
Normally, companies define a price range for bidding in the IPO. In case you are
not sure what price to bid at, then you can just bid at the cut off price. In that
case, it will be assumed that you have bid at the discovered price and the allotments
will be done accordingly. You will be allotted shares at the discovered price. This
is a good idea if you don’t want to bid at a price and get rejected because your
bid was lower than the discovered price of the IPO. The problem with quoting a price
is that if the discovered price is above the bid price then your bid gets automatically
STEP 4Applying in retail quota versus HNI quota
Mention clearly what quota you are applying under. While the retail quota has a
35% allocation, the HNI quota has a 15% allocation and includes all bids above Rs.2
lakh. You can select your quota based on your discussion with the broker as to which
quota will be better to apply in. Ensure that all your bank details and DP details
are filled up fully and properly.