IPO

IPO Process

While applying for the issuance of IPO for a company, an individual needs to be well versed in the IPO application process. If you are an investor looking forward to applying for an upcoming IPO, you can choose to take an online or offline bidding process as per your convenience. The allotment process is according to the total number of applications. 

 

What category to invest in IPO

There are three types of categories an investor can invest in IPO, which are retail, non-institutional, Qualified Institutional Buyers (QIB). As an investor, you can either invest under the retail quota or the non-institutional quota. Applications evaluate less than 2 Lakh in can be logged in the retail quota while individual applications that go above 2 lakhs are logged in the non-institutional category. Retail investors get allotted based on maximum ownership while non-institutional investors get proportionate allotment. 

 

Things to know while applying for a book-built IPO? 

Offline and online investment form: The IPO application for any book-built issue can be either made offline by filling a physical form or online through an online trading account. The data about your account is automatically downloaded from your DP master data and the online application process for IPOs is a lot simpler and more efficient. 

 

Role of investment bankers: The IPO issuer gets in contact with the investment banker and finalizes the price of the issue. The company presents an indicative range for the price and one can apply within that range. If an individual applies for IPO below the range will the application automatically reject?

 

How to bid for IPO? 

In case you are not sure about the price to bid at, you can just bid at the cut off price. In the following case, it will be assumed that you have done at the discovered price and the allotment will be done accordingly. By the following process, you will be allotted shares at the discovered price and then you don’t have to worry about your application getting rejected because your bid is lower than the discovered price of IPO.

 

Retail Vs HNI Quota 

Mention clearly what quota you are applying for IPO allotment. Normally the investment is done based on your investment and any investment that is above Rs 2 Lakh is treated as HNI application while below 2 Lakhs is treated as retail application. Ensure that your bank details and DP details are correctly placed in the form and properly.  

 

Timely Logging of the bids: You must not wait till the very last hour to log in to your application. Take the help of your broker to log in your bid at least a day before the issuance of IPO. The broker does not accept fresh bid after the cut off time and if your bids are logged in after then you might lose a chance to participate in IPO. 

 

Three minor things you must not overlook while applying for IPO 

Most investors make minor mistakes while filling their IPO applications. So that it doesn’t become your case, here are 3 ways to cases you must not miss out on. 

 

Form Completion: In case you are applying for IPO physically make sure that the IPO form is complete in all aspects. Your application can be rejected if any of the fields are left incomplete. Also, make sure that the signature in the application form matches your signature in the record of the DP as well as the records of the banks. 

 

Understanding ASBA: In case you are making an online bid, it is recommended that you choose the ASBA facility. Under the ASBA facility, only the application bid amount is blocked, and your bank account is not debited. On the date of share allotment, only the proportionate allotment is debited to your account and the block is immediately removed from the remaining funds. 

 

Bid Cancellation: Your bid can be even canceled till the cut off time. You can cancel your bid for any number of times before the cut-off time. There is no restriction on that.