Initial public offering IPO is a process of enlisting your company in the stock market for the issue of shares to the investor for a considerable amount to attain capital for expanding the business.
1. Select an IPO:
First select the IPO you want to invest in because there are more than 50-100 companies enlist in the stock market arising the fund more than 10000+ cr, so selecting the company will be the first step.
2. Essential Accounts:
There is this 3 essential account you need to have to invest in the stock market, it may be IPO or Stock market.
- Demat account
- Bank account
- Trading account
3. Apply for IPO:
Since the IPO is released in the stock market for the first time you cannot buy it directly you have to apply for the stock by booking in advance. So the company provides the date on which the IPO will be released. And you need to apply at that given time usually the date will be released 1-3 months before the release.
4. Application status:
Once you apply for the stocks the assigned amount will be put on freeze from your account unless the stocks are assigned to your name.
- Lot size
The IPO is an initial offering so it will always be allocated in the form of a “lot”. A lot from every company doesn’t connect same number share.
EX: A company may contain 20 shares in 1 LOT
B company may contain 50 shares in 1 LOT
Although the number of shares differs it usually sums at the price of 15000rs.
- How to Bid in an IPO?
The price of the stock is not determined so there will be a price band set by the company under which you need to bid on.
EX: Price band 10-20
5. Allocation of stocks:
After completing all the above steps the shares will be allocated to your Demat account within 14 days of booking but if there was overbooking and if you didn’t get the shares then the amount deducted from your account will be credited back to you within 5 working days and once the all this process is complete the shares will be reflected in your Demat account in which you will be able to trade.
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