Apart from the mandatory PAN, demat plus trading account, you need money to invest
in IPOs. You can use your savings to invest in an IPO.
But do not worry if you don’t have sufficient funds in your account. There are many
banks and non-banking finance companies (NBFCs) that will lend you money, at an
interest rate for IPO investing.
Once you have the money, you can begin the IPO application process. Let us tell
you how to apply for IPO in a few easy steps.
1. You can apply for IPO through activated trading account or bank account. You
can place orders by calling your relationship manager (RM), applying on mobile app
or contacting centralized call centre. You can do an online IPO application also
if you want. Structure wise, how to buy IPO online is not different from any other
In the good old days, people had only one way to invest in IPO - buying the ipo
form and applying through broker.
2. There is Application Supported by Blocked Amount (ASBA) facility, which is mandatory
for IPO applications. The ASBA allows the banks to block money in your bank account
for the IPO.
3. Next comes, bidding step. You need to bid as per the IPO lot size is mentioned
in the IPO prospectus. Lot size is the minimum number of stocks/shares you have
to apply for during an IPO. There is a bid price. The company usually sets IPO price
band. You have to bid for shares anywhere in the IPO price band.
4. Once you are done applying, IPO share allotment will happen. If there is too
much demand, you may get fewer shares than you had asked for. In rare occasions,
you may not get any IPO shares. Once the shares are allotted, they will be credited
to your personal demat account.