An IPO stands for Initial Public Offering. IPO is a process by which a company issues stock or shares to the public for the first time to raise funds. IPO is a very effective tool used to raise capital for expansion of business by companies.
The following are the broad steps in an IPO process:
- Selection of Merchant Banker, Sponsor Bank, Registrar and other Intermediaries.
- Preparing Draft Red Herring Prospectus(DRHP) and getting it approved from SEBI/ Exchange(s).
- Determination of Issue Price and IPO opening and Closing dates after approval of DRHP.
- IPO opening and closing, processing and Listing.
Registrar is a SEBI registered Intermediary appointed by the company. The Registrar is primarily involved in processing of IPO applications, allocation of shares to applicants based on exchange approvals, process refunds through ECS or cheque and transfer allocated shares to investors’ Demat accounts.
An initial public offering (IPO) is deemed to be undersubscribed when the number of shares that investors have applied for fall short of the shares offered by the company. Example: A company has offered 1000 shares and there are applications for 900 shares, then it means that an IPO is undersubscribed.
An initial public offering (IPO) is deemed to be oversubscribed when the number of shares that investors have applied for exceed the shares offered by the company. Example: A company has offered 1 lac shares and there are applications for 10 lac shares, then it means that an IPO is oversubscribed ten times.
To Apply in an IPO, the pre-requisite is to have a bank and a demat account. You can either apply through your bank application, through your registered broker or through UPI apps.
Applying for shares in an IPO doesn't guarantee that you will get the shares. Allotment depends upon several factors like the number of bids/ applications received in different categories, the price at which investor applied for shares etc. The basis on which shares are allotted to the investors is decided by the Exchanges and accordingly shares are allocated.
You can go to Public Issues and check your allotment by inputting your data.
No, one person cannot apply multiple times through multiple applications for an IPO.
Retail investors can invest up to INR 2 Lakhs under retail portion.
The guardians of minors can apply for IPO allotment on their behalf subject to the prospectus.
No. As per SEBI guidelines, Third party applications are liable to be rejected and an investor should apply from his/her own bank account.
The amount will be released by the bank within 4 working days from the date of allotment. The unblocking of the amount is not shown seperately in the bank account statement, only the lien, which was marked earlier, is released. In case the Securities and Unblocking if any, has not been Credited/Unblocked to your Beneficiary A/c (DPID & Client ID) and bank, please contact/mail to us at the following address. Phone: 011-45121795, Email: firstname.lastname@example.org
We request you to share your bank mandate details, as per the format given below, so that we may take up the matter with the sponsor bank / SCSB and resolve the complaint at the earliest.
- PAN number of Applicant
- Bank Name
- Bank Account No
- Bank Branch Name
- IPO Application No
- Demat Account No
- Amount Blocked