Steps to apply in an IPO?
Who doesn’t like IPOs?
In the financial markets, IPOs are the closest thing to an India-Pakistan cricket match. There is a lot of hype surrounding each IPO in the market.
This is because IPOs have the potential to offer very high returns to investors. But the next question that arises is: How do you apply for an IPO? The procedure to bid for an IPO is slightly different.
Although you can apply for IPOs online, remember that an IPO order cannot be placed directly through your broker. You need to place the order through your bank that provides you with ASBA facility.
What is ASBA?
Application Supported by Blocked Amount (ASBA) is an easy and efficient way to apply for IPOs. When you invest through ASBA, the funds are blocked in your account for the IPO. The money leaves your bank account only if you are allotted shares in the IPO. During this period, you can also earn interest on these funds.
It is also worth mentioning that Securities and Exchange Board of India (SEBI) has made ASBA mandatory for IPO bidding.
How to apply for IPO online
Log-in to your online net-banking account
In the investments section, click on the IPO/e-IPO option
Fill out your depository details and bank account details to complete the verification process
After this, you are led to a screen titled ‘Invest in IPO’
Select the IPO for which you would like to apply
Enter the number of shares and the ‘bid price’
Read the ‘Terms and Conditions’ document before you place your bid
Confirm and place your order by clicking on ‘Apply Now’