ET Wealth | How to invest in an IPO

An initial public offer is the first offer a company makes to the public to subscribe to its shares. The reason for raising funds through an IPO depends on the objectives of the company. Many IPOs are being launched these days and investors may wish to participate in them.Must havesThe applicant must have the following:Demat accountTrading accountMobile number linked to the bank accountUPI IDApplication processLog into trading app or mobile application of the broker and go to ongoing IPO section. Select investor type and IPO to apply for. Enter number of shares and bid price. UPI id must be entered as well. 84524749Blocking of amountOnce the application is submitted after entering all the necessary details, mandate request is sent on the UPI application for approval. The applicant must log into the UPI application and accept the mandate request. Once it is accepted, the amount for IPO is blocked.82407481Unblocking /debit of blocked amountUpon allotment, if no shares are allotted, the entire blocked amount is unblocked. If there is part allotment, the requisite amount is debited from the bank account and remaining amount is unblocked. The entire amount is debited if the applicant is allotted all the shares that were applied for.Points to noteThe IPO application can get rejected if the person applying is different from the one whose bank account is used to apply.The IPO application is most likely to receive allotment if the application is made at the cut-off price.(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)

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