How can I invest in IPOs in India?

The Indian stock market offers plenty of opportunities, and investing in an IPO (Initial Public Offering) is one of the best ways to start your investment journey. If you're wondering how to invest in IPOs in India, this guide will walk you through the process step by step!

1. Open a Demat and Trading Account

To start investing in IPOs in India, you first need to open a Demat and Trading account with a registered stockbroker. The Demat account holds your shares electronically, and the Trading account is used to buy and sell them. You can open these accounts with any financial institution, such as Angel One, Zerodha, or others.

Once you have these accounts in place, you are ready to start investing in IPOs!

2. Research Upcoming IPOs

Before investing in an IPO, it's important to do your homework. Research the company, its financials, the offer price, and the potential for future growth. You can find this information in the company’s Red Herring Prospectus (RHP), which is available on the stock exchanges and through your brokerage platform.

Keep an eye on the IPO calendar to find out when new IPOs are launching. This will help you stay informed about investment opportunities.

3. Apply for IPOs

When an IPO opens for subscription, you can apply for it through your broker’s platform or mobile app. You need to fill out an application form with the number of shares you wish to buy. You can apply for IPOs in two ways:

• ASBA (Application Supported by Blocked Amount): This is a popular method where your bank account will block the application amount until the allotment process is complete.
• Non-ASBA: Alternatively, you can apply through a non-ASBA method if your bank or platform supports it.

4. Wait for Allotment

After you apply, the shares will be allotted to you based on the number of applications and the demand for the IPO. In case the IPO is oversubscribed, your application might not be fully allotted. If you're lucky, you’ll receive the full allocation.

Once the allotment is done, you can check your Demat account to see the shares in your account.

Conclusion

Investing in IPOs in India is a fantastic way to kickstart your stock market journey. By opening a Demat account, researching upcoming IPOs, applying correctly, and waiting for allotment, you can enjoy the potential rewards of early-stage investments. Remember to invest wisely, keeping in mind your long-term financial goals.

by Priya Sahu

© 2024 by Priya Sahu. All Rights Reserved.