What is IPO
Initial Public Offering is the first stock which a company puts up for sale when it goes public. This is when a privately held company turns into a public entity and its shares are traded on the stock exchange. The company shares its ownership when it becomes a public company. Once the shares go public the company then allots it to the investors based on the demand for the shares. When the IPO Process is on, a small set of shares are reserved for different kinds of investors. They include investors like Individual or retail investors, Institutional buyers who are qualified and High Net worth Individuals.
If you want to invest in an IPO you need to do deep research about the company you want to buy shares of. You need to check their historical records in terms of their IPO. You should see if their promoters are reliable or not. The products offered by the company should have a good potential for growth. Read the prospectus carefully.
Why should one invest in IPOs
IPO in India is seeing a steady rise as many companies are now going public. Every investment opportunity involves risk. IPOs have their own risk factors. Yet many people prefer investing in IPOs. Here’s why:
• If you invest during a company’s initial stages, as the company grows you can enjoy the benefits too.
• When the company starts growing, its value increases which in turn increases the value of your holding in that company.
How can one apply for an online IPO investment
If there is a company whose shares you want to buy, then the next question arises about how to apply for IPO online. How to buy IPO online? The process for IPO application online is relatively easy.
• For an online IPO application, you need to have a trading account, demat account or a savings bank account.
• As an IPO applicant, it is compulsory for you to use the ASBA facility. ASBA is Application Supported by Blocked Accounts. This facility is an authorization to block your application amount in your bank account for your subscription to a public issue.
• The application forms are available online and also the bank which you want to operate your transaction from has the ASBA option given it is a Self-Certified Syndicate Bank.
• This facility removes the hassle of paying by DDs or cheques as the transaction is done directly from the bank account.
The above steps complete the IPO online application.
As per the new SEBI regulation all public offerings (IPOs) after January 1, 2016 need to be fulfilled through the ASBA (Application Supported Block Amount) route only. These changes have altered the existing seamless online bidding process. You can view information about Ongoing/Forthcoming IPOs in Power Indiabulls Trading Application.
How to apply for IPO through ASBA:
1. You can Download the "IPO Application Form" from the link https://www.nseindiaipo.com/issueforms/html/index.html
2. Fill the details like Name, PAN, DP Name, DP Id etc. in the IPO Application form, to get the shares in your demat account with us.
3. Contact your nearest Indiabulls Ventures Branch to submit the IPO Application form or you can get in touch with your Relationship Manager for further assistance.
What is ASBA?
ASBA means “Application Supported by Blocked Amount”. ASBA is an application containing an authorization to block the application money in the bank account, for subscribing to an issue. If an investor is applying through ASBA, his application money shall be debited from the bank account only if his/her application is selected for allotment after the basis of allotment is finalized, or the issue is withdrawn / failed.