- Demat account, trading application and UPI ID are mandatory if you are applying for an initial public offering (IPO).
- Upcoming IPO of Zomato can also be applied before its IPO opening date.
- There is already a lot of buzz around Zomato's ₹9,375 crore IPO.
Presently, the upcoming IPO that has created a lot of buzz is Zomato, a food delivery startup that is currently valued at around $8.1 billion.
Many of you may want to subscribe to Zomato’s IPO for one common reason that most of us have seen its growth journey very closely over the years.
An IPO is the first sale of shares by a private company looking to raise capital from investors and turn itself into a public company. To invest in an IPO, you need to apply to buy a ‘lot of shares’ from the market. The bidding for these IPOs is usually open for three days particularly during market hours.
Now, let us understand how to invest in IPOs. A Demat account, a trading application like Zerodha, Angel Broking etc and UPI ID on BHIM app are necessary if you want to invest conveniently in an IPO.
Unified payment interface (UPI) is a banking system for money transfers on payment apps like Google Pay, PhonePe and so on.
One of the simplest ways to track IPOs and invest in them is through trading platforms.
Here’s how you can do it through Zerodha’s Kite application, which is meant for trading stocks and commodities.
- Login to the mobile app and select the IPO option under console. If you’re logging in through desktop, then go to console -- portfolio -- IPO.
- You will find a list of IPOs that are open for investment. Select the IPO you want to invest in.
- Enter your UPI ID from the BHIM app. Ensure your UPI ID is mapped to your personal bank account.
- Select investor type for your application.
- Enter the lot size (number of shares required to buy in one lot) announced by the company.
- Tick on the cut off price for more chances of allotment of shares as it indicates investor’s willingness to subscribe to shares at any price discovered within the price band. Cut off price is the issue price.
- Retail investors can bid for three lots.
- After this step, click on the check box to confirm and submit.
- The last step is to accept the mandate request for proceeding with IPO on your BHIM UPI app. Once you accept the mandate, the amount of funds for IPO will be blocked till the allotment.
- Now wait till the allotment date of shares to see if you have received the lot size you bid for.
Paytm Money has for the first time allowed users to apply for an IPO before the actual IPO opening. This feature is built to help a large proportion of investors who do not trade actively and may miss out during market hours.
Basically, a retail investor can plan an IPO order 24x7 on days when a pre-open IPO is enabled.
Pre-IPO feature is currently live on Paytm Money’s mobile app.
The process to apply in a pre IPO is similar to that of other trading platforms. You just need to fill your investor details, lot size and accept the mandate on BHIM app.
Another way to invest is through your bank. This option is generally available between 5 a.m. and 11 a.m. on the bank’s website. Here’s how to do it:
- Log in to your bank’s net banking account.
- Go to the investment section and select the IPO option.
- Fill your investment and bank account details to complete the verification process.
- Later select the IPO you want to apply.
- Enter the number of shares and bid price.
- Read and accept ‘terms and conditions’ documents.
- Submit your application.
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