How to apply for an IPO online: A step-by-step guide

IPO online

Initial Public Offerings (IPOs) offer investors a unique opportunity to become early shareholders of a company, often paving the way for substantial financial gains. With advancements in technology, applying for an IPO has become more convenient, enabling individuals to participate directly through online platforms. 

In this guide, we will walk you through the step-by-step process of applying for an IPO online using a trading platform.

Understanding IPOs and their significance

Before diving into the application process, it’s essential to understand what an IPO entails. An IPO marks the first time a company offers its shares to the public to raise capital for expansion, debt repayment, or other business goals. For investors, IPOs present an exciting chance to invest in companies with growth potential.

Participating in an IPO allows investors to buy shares at a predetermined price, often at a discount compared to market rates after listing. This underscores the importance of a smooth and informed application process.

 

Step 1: Choose a reliable trading platform

To apply for an IPO online, you’ll first need access to a trusted trading platform. A trading platform acts as a bridge between you and the stock exchange, enabling you to complete the application seamlessly. Look for a platform that is user-friendly, secure, and provides real-time market updates.

Factors to consider when selecting a platform include:

1. Ease of account creation.
2. Availability of IPO-specific features.
3. Transparent fee structure.
4. Strong customer support.

 

Step 2: Open a Demat and trading account

A Demat account is necessary to hold the shares you purchase during the IPO, while a trading account facilitates transactions. Most trading platforms simplify this process, allowing you to open both accounts simultaneously.

Here’s how you can set up these accounts:

1. Visit the website or app of the chosen trading platform.
2. Complete the registration process by providing your personal details, including name, email ID, and phone number.
3. Submit the necessary documents, such as PAN card, Aadhaar card, bank details, and proof of address.
4. Complete the KYC (Know Your Customer) verification online.

Once your account is verified, you’ll be ready to participate in IPOs.

 

Step 3: Check the list of ongoing and upcoming IPOs

After setting up your account, explore the IPO section of your trading platform. Here, you’ll find a list of ongoing and upcoming IPOs, along with critical details such as issue dates, lot sizes, price bands, and company profiles.

Analysing this information helps you make informed investment decisions. Look for companies with strong financial performance, a clear business model, and promising growth prospects.

 

Step 4: Place your IPO application

Placing your application is a straightforward process. Follow these steps:

1. Log in to your trading platform: Navigate to the IPO section.
2. Select the desired IPO: Click on the company you wish to invest in and review the prospectus and other details.
3. Enter bid details: Fill in the number of shares you wish to purchase and the bid price within the specified range. Most retail investors opt for the “cut-off price,” ensuring allocation at the final price decided by the company.
4. Link your bank account: Use the ASBA (Application Supported by Blocked Amount) facility, which blocks the bid amount in your bank account until the shares are allotted.
5. Submit your application: Double-check all details before confirming your application.

After submission, you’ll receive a confirmation email or SMS acknowledging your application.

 

Step 5: Monitor your application status

Once the application is submitted, you can monitor its status through the trading platform. The status typically updates after the IPO closes, indicating whether shares have been allotted to you.

Here’s how you can check your allotment status:

1. Log in to your trading account.
2. Navigate to the IPO section.
3. Select the specific IPO and click on the allotment status.

Alternatively, you can check your allotment details on the registrar's website by entering your PAN or application number.

 

Step 6: Post-allotment actions

If you receive an allotment, the shares will be credited to your Demat account on the listing day. You can choose to hold them for long-term investment or sell them based on the listing price and your financial goals.

If you don’t receive an allotment, the blocked amount in your bank account will be released.

 

Summing up

Participating in IPOs is an excellent way to diversify your investment portfolio and potentially earn high returns. With online platforms simplifying the process, becoming a part of a company’s growth journey has never been easier. Following this guide ensures that you can apply for an IPO online efficiently and securely.

If you're looking for a seamless and reliable experience, trading platforms like Ventura offer a robust design to cater to both novice and experienced investors. Take control of your investments today with Ventura!