What Is IPO? How To Invest In IPO? – In today’s time, many new companies are launching IPO and many retail investors are also investing in it. Many investors are not well aware about IPO yet they want to invest in it. There are many people who do not know about IPO, yet they invest in it. If you do not have much information about IPO, then in this article we will tell you what is IPO? How to Invest in IPO?
What Is IPO?
First of all let us tell you that the full form of IPO is Initial Public Offerings. If you invest in the stock market then you must be well aware that what is an IPO? If you are not aware about this, then let us tell you that IPO is brought by a company which is already doing some kind of business. Through IPO, the company offers its shares to the public for the first time. After the IPO offer, investors apply to buy the shares of that company.
For your information, let us tell you that IPO comes under the primary market. After this the company gets listed in the stock market for stock trading. Shares can be listed on the National Stock Exchange or the Mumbai Stock Exchange or both. When a company offers its shares through an IPO, it is called an issuer.
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Any private company becomes a public company only after IPO. That is, the public also gets shares in that company. For example, let’s say that recently Zomato has launched an IPO. Earlier Zomato used to be a private company, but after launching IPO and selling some shares of its company, it will become a public company. If you want to invest in IPO of any company, then for this you have to follow the procedures mentioned below.
Who Can Invest In IPO?
For your information, let us tell you that any person can invest in IPO launched by any company. Not only this, even if your age is less than 18 years, you can still apply in IPO. For this, first you have to open a demat account. Apart from this, trading account has to be opened to buy and sell shares of the company. If you are a retail investor then you can invest in IPO in retail category up to ₹ 200000. In today’s time, many such online platforms have been launched from where you can open demat and trading accounts.
How To Invest In IPO?
If you want to invest in IPO then there are two steps you can follow for this. If you have a demat account and trading account then you can invest in IPO through any online net banking. To invest in IPO through online net banking, you need to have a demat account and PAN card.
If you do not have net banking facility, then you can invest in IPO by paying UPI. Usually the IPO of any company is open for 4 to 5 days. You can apply for IPO within the stipulated time and if the IPO is subscribed and shares are allotted to you, then your shares are credited to your trading account and money is deducted from your bank account. Huh.
How Is IPO Allotted?
If an IPO gets 100% subscribed then shares are allotted through lottery. But if there is less than 100% subscriber in an IPO then the shares are credited to your trading account and money is deducted from the bank account. Most of the IPOs get 100% subscribed hence you should bid only at the cut off price. However, if you have not been able to get the shares allotted through IPO, then you can do the shares of that company through the secondary market.