What is an IPO?
An IPO is an Initial Public offering (IPO) which basically means that a company is offering shares of its company for the public to buy at large. An IPO gives the opportunity for any company to access the public market but with that also comes additional discloure and reporting norms that need to be followed.
Why should one invest in IPO’s?
Investing in IPO’s is generally a good idea because at the time of an IPO all the information about the company is available to both institutional and retails investors alike. Moreover, since the pricing is determined and the bankers to the issuer underwrite one generally does not need to worry if the purchase price is appropriate. However, it is always advisable to go through all the offer documents carefully before investing in any IPO.
How to invest in an IPO?
In order to invest in an IPO one must have a demat account. For people who have a UPI ID and are looking to invest in the retail category (all investors applying for below 2 lakhs) they can do so directly online: E-IPO. For investors looking to invest above two lakhs they will have to get in touch with their relationship manager and submit an ABSA form to the banker. For applying to the IPO the amount will be only blocked in your account and only upon allotment will it be debited to the extent of the share alloted to each client.