How to Buy IPO Online? Get All About It Here!
There is a wide array of options & possibilities to invest in the share market. However, IPO can be one such option that can prove fruitful for your dreams. People find it complicated to invest in IPOs. But it is not so! If you want to know about how to buy IPO online, then you are surely in the right place. Read till the end to know the easy process to buy it online.
Things to consider that will help you in getting how to invest in IPO:
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Choose IPO; You Wish to Apply In!
For this, you need to go through the prospectus of the company and its performance in previous years. It will provide you a fair idea about the company’s purpose & plans that will eventually help in picking IPO in which you want to invest your money.
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Decide About Funding!
For funding purposes, you can count on your savings. However, if you don’t have enough amount of funds, then you can borrow it from financial institutes or finance companies. So, you needed to know what amount of money can you spend on IPOs.
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Creation of Demat Account
After making decisions about the company where you will invest and funds you will invest in IPO, the next point you should know is the creation of a Demat account, as, without it, an investment in IPO wouldn’t be possible. This account will store financial securities & stocks electronically. You can create it easily by depositing Aadhaar card, identity proofs, address, and PAN card.
After following these steps, you need to step ahead towards how to buy IPO shares. Get all here!
How to Buy IPO Online?
As you have created a Demat account, so now your further steps would be:
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Application Process
You can either use your bank account or trading (Demat) account to apply for an IPO online. After activating the Demat account, get aware of ASBA- Application Supported by Blocked Amount facility. It is compulsory for all IPO applicants. With this facility, banks get authorization to block the whole money in the bank account of the trader.
For this, you need to specify:
- Demat Account Number
- Bidding Details
- PAN
- Bank Account Number
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Bidding Process
Now, as the application process has been completed, you will now need to initiate the bidding process. You are required to apply for lot size (covers fixed & minimum number of shares), you want to invest in. These lots have a bid price. The company sets a price band, of which the upper limit is recalled as a cap price, and the lowest one is known as the floor price. This is the price range in which you need to bid. During an IPO, you can revise the bid.
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Allotment Process
The allotment is all in the hands of the company. You might get all shares for which you have applied for, or might get some of it or even fail to get anything. So, allotment is partial or full or even nil.
After getting shares allotted to you, you will get all those in your Demat account. After that, within seven days of share finalization, the shares will be listed on the stock exchanges.
Final Words!
Hopefully, you now know how to buy IPO stock online. Before initializing the trading process, consider important things mentioned on the top. Trading is not complicated if you do it with precision and after having done thorough research.
Research properly, and then buy IPO online!