What is an IPO?

An IPO (Initial Public Offering) is the process through which a company offers its shares to the public for the “first time” and gets its shares listed on a stock exchange. As per general market understanding, an IPO helps a company raise funds for various purposes, such as: 

• Business expansion,
• Debt repayment, or 
• Other corporate needs

Realise that an IPO investment carries market risk, and the share price can move above or below the issue price after listing.

How to Apply for an IPO in India?

To apply for an IPO in India, investors generally need a demat account, a trading account, and a bank account that supports UPI payments. After selecting an IPO, investors can place their bid through their broker’s platform or other permitted application channels. While placing bids, they can choose the number of lots and bid at the desired price within the IPO’s price band. 

For UPI applications, the investor must approve the “payment mandate” received from their UPI app before the application deadline. The required amount is blocked in the investor’s bank account until the allotment process is completed. If shares are allotted, the corresponding amount is debited, and the shares are credited to the investor’s demat account. On the other hand, if no shares are allotted, the blocked amount is released.

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