In this day and age, one of the headlines prevalent in the finance section of newspapers is about Initial Public Offerings or IPOs of various companies. An IPO is an essential step towards a company going public and widening its equity base. New IPOs by companies that have a strong market presence tend to draw a lot of media and public attention. You can apply for an IPO through your bank account or your demat and trading account. In this article, we shall discuss
An Initial Public Offering is, as its name suggests, the first offer of public subscription to shares by any company. Through an IPO, a company that is privately held starts the process of getting listed on a stock exchange and having its shares traded there. There are two main types of IPO, namely a Fixed Price Issue and a Book-building issue. While the former type of IPO has a fixed offer price for shares, the latter has a price band instead. Both types of IPOs remain open for 3 to 7 working days (extendable to 10 working days if the price band is revised).
In order to apply to a new IPO, you must have the following documents:
Furthermore, you must have a demat account and a functional bank account.
There are two ways to apply for a new IPO: online and offline. Let us discuss both the approaches to IPO application:
1. Through your broker's trading account platform: You can apply for an Initial Public Offering directly through the trading account platform of your stock broker. In order to do so, you must follow the steps mentioned below.
2. Through your bank's Internet Banking facility: It is also possible to apply for a new IPO through your Bank's Internet Banking facility. The steps required to do so are as follows:
You can also submit your application for a new IPO offline. The steps for an offline IPO application are as follows:
Although you can apply for both types of IPOs online as well as offline, opting for an online application can help you save time and effort. You can check the status of your IPO application on the website of the registrar to the IPO as well as on the official websites of the Bombay Stock Exchange or the National Stock Exchange.