The demand for IPOs is increasing drastically in India. More and more companies have launched IPOs and gone public in the past few years. Also, investors have started preferring IPOs to earn dividend income. The rise of online trading platforms has also made it easy for investors to apply for an IPO. Let us discuss the process of applying for an IPO in India.
Are you familiar with an IPO?
IPO is the liquidation of shares by a company that has turned public. It is also the first time a corporate entity offers its shares to the public. Launching an IPO makes the company’s shares visible on different stock exchanges. Investors can buy shares of a particular company in the stock market and earn dividends. Companies can obtain funds to meet business requirements by selling shares for a given price. A corporate entity might issue new shares to be sold in an IPO. Existing shareholders within a company sometimes liquidate their shares in an IPO launch. Investors who buy shares of a public company after an IPO launch receive dividends (a part of the total profit earned by the company). To make investments, you should follow the IPO application process.
The IPO application process in detail
Have you selected an upcoming or current IPO for investments? Do you have an authorised trading account to invest in an IPO in India? There are multiple steps for mastering the online ipo application process, Here are the steps involved in applying for an IPO in India via a trading platform:
Research
The first step is to understand the IPO in its entirety. Based on your investment strategy, you must decide whether the online ipo application is the right choice or not. You must analyse the financial performance of the concerned public company in the last few years. Do not decide to invest in an IPO without understanding the risks and returns.
Have Trading and a Demat account
The next step is to open a trading account with a registered Indian stockbroker. Without a trading account, no one can trade financial securities in the stock market. Also, you might not buy shares in an IPO and sell them on the same day. You will require a Demat account in India if you aren’t an intraday trader. With a Demat account, you can hold securities bought in an IPO.
Fill out the IPO application
You can place your IPO application on any particular trading platform. Choose a reliable firm like Religare Broking Limited that enables you to for an ipo online apply via its trading platform, which will be linked to your Demat account. You will have to choose your lot size (number of shares) and bid value on the trading platform. Once all details are accurately filled in, submit your IPO application.
Wait for approval
Once you have submitted the IPO application, it’s time to wait for approval. If your bid is approved, the demanded shares will be offered to you. After approval, the shares are transferred to your Demat account securely. In addition, online trading platforms allow investors to track the status of their IPO applications with a single tap.
Benefits of IPO (Initial Public Offering):
An initial public offering (IPO) is the first time a company sells its shares to the public in the stock market. Investing in an IPO can potentially offer several benefits, including:
- Potential for high returns: IPOs can offer significant potential for high returns in the short term if the stock price rises rapidly after the IPO. Investors who get in early can often realize significant gains if the company performs well in the market.
- Opportunity to invest in new companies: IPOs offer investors the chance to invest in promising new companies that are not yet publicly traded.
Diversification: Investing in an IPO can also provide diversification benefits to a portfolio by adding exposure to a new sector or industry that may not have been previously represented in the portfolio.
It is important to note, however, that investing in an IPO also carries certain risks, such as the potential for the stock price to decline sharply after the IPO or the company’s performance to fall short of expectations. Therefore, investors should carefully evaluate the risks and benefits before deciding to invest in an IPO.
In a nutshell
A trusted broking firm can simplify the IPO application process for investors with its trading platform. Also, you can buy shares in an IPO and transfer them securely to the Demat account. The entire process of the transfer of shares is quick and secure.
It’s time to find the right IPO to invest in 2023! Read more blogs on our website.
