How to Buy IPO? Online & Offline
Warm regards investors J
Are you passionate about investing and seeking information about IPO investment strategy? Then this article will help you out in some way.
Every month, many companies land their new expansion project in the market and come up with their IPO in the share market which attracts thousands of investors every day to acquire their ownership in the company. The investors made investments in the schemes and operate their trading activities and get the respective returns on them.
The IPO gives them the opportunity to be a part of a big brand name and achieve higher returns also when the company prospers. For this, the company IPO issues a number of shares in the public at some specific price band/fixed price. These shares are allotted to the interesting individuals who have applied for the same and in this way; the investors get ownership in the company.
So, the interesting individuals who have the taste in the trade market or who want to experience the investment activities have to apply for the shares of the IPO.
The commencement of trading activity is initialized right after you apply for the shares of the company. The application process for the shares involves a two-way process. You can choose any among them. You can apply
- Offline OR
- Upcoming IPO 2020
How to Buy an IPO online?
- For applying online, you should first have a Demat account and a trading account also. They will be linked to your general bank account.
- Once your trading account will get open, you have to open it and select the IPO, for whose shares you want to apply.
- Now, transfer the amount for the number of shares you want to apply in the trading account through your bank account.
- If the shares will be allotted to you by the same IPO, then the shares will be transferred to your Demat account.
- In case, you did not get the allotment of shares, then your submitted amount will be refunded to you. The refund will be transacted either by transferring the amount directly at your postal address or it will be transferred to your bank account via ECS.
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How to Buy an IPO Offline?
What do you need to know about investment in IPO? Let’s take a read at the following
- For an offline application, you have to grab an application form from your broker and fill it nicely covering every mandatory field.
- You should have your Demat account. The trading account is not necessary to open. It will be needed only when you have a plan to sell your shares which you had achieved via IPO.
- The Demat account will be required to pour your rewarded shares via IPO.
- Made a decision for the amount you want to invest in the IPO for buying the shares and after that issue a cheque for that particular amount.
- Attach a PAN card copy with your application form, in case your amount is going beyond Rs 50,000.
- You have to hand over these documents, i.e. the application form, the PAN card copy, and the cheque to your broker, who in turn will give you an acknowledgment form.
- The broker then will submit your form to the company and this is how your application for shares part will be executed.
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Precautions to be taken-
There are various facts that need to be taken as the cautions and the precautions and they literally need to be exercised by you, if you are a new investor in the so-called IPOs.
Tips for investing in IPO
- First thing is that, analyze yourself. You should know what are your requirements and what kind of returns you expect from the IPOs.
- Read the Red Herring prospectus of the company. Read the financial status and market capitalization of the company. More importantly, grab the details regarding how the company has strategies itself for utilizing your money, for which projects, it is planning to invest your money.
- If you think that the projects in which the company will be investing can output you good returns, then go for it.
- You should match your risk tolerance power with the risks associated with the company IPO. If the company involves government securities and public institutions, then it will benefit you also as the involvement of the government in private institutions automatically provides safety to your investment. So, there is a thing like this then it will be good for you.
- Check the background of the promoter of the company also. How the promoter operates in his company, what strategies he prefers his past year performances and his willingness to bear risk; all this positive attitude adds potential to the company and it adds confidence in the company to provide good returns.
Who can invest in the IPOs?
IPOs can be made to invest for, by many kinds of investors. It is just the kind of offers which attract kinds of interesting individuals to invest their money for it, so they can buy the ownership of the company.
So, who can be the investors of IPO, let us see that-
Retail Individual Investor-
The Retail Individual Investors are those who invest for small amounting shares. They can be greenhorn investors also (who come first time in the market).
Qualified Investment Buyers–
The qualified Investment Buyers are those which act as a mediator between the company IPO and the investors. They pool the money from the investors and invest in the IPOs on the basis of their knowledge.
They possess professional knowledge about the trade market and they know the upside downs of the market. They are also abided by the rules and regulations formed by the SEBI.
Non- Qualified Investment Buyers–
The Non- Qualified Investment Buyers are just reverse of the Qualified Investment Buyers. They are just the investors of the large value of shares.
I hope you are now acquainted with IPO trading basics, investment strategy, and tips.
My sincere advice is if you are a beginner investor then you need to learn the basics of investing manage your portfolio and make a smart decision.
Dear readers, I hope you had a great time reading the above content on tips for investing in IPOs.
I hope you are satisfied and found the content useful.
I am very much pleased to share my knowledge with you
So, in whatever category of investor you fall, you can invest for the IPOs, but remember the tips of investing and the process of investing which you have been provided just above.
Still, you feel some doubt related to “How to buy IPO?”, and then let us know. For that, you can comment on the comment box and share your queries.
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Thanks. Happy investing