Saturday, July 13, 2024

Business

What is the IPO allotment process?

IPO allotment status

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An Initial Public Offering is a momentous occasion in a registered company’s history. It is a enough funds for the bid. Since market regulators have made the blocked amount facility mandatory for IPOs, you must hold it for a successful bid.

Allotment

The IPO allotment status happens behind closed doors, depending on the number and the validity of bids submitted. Not all applicants get what they requested as the demand outstrips supply by a vast margin.

Approval

Within a week, the registration ends and confirms the IPO status of successful bidders. You can check them on the registrar’s website or app. Alternatively, the National Stock Exchange and the Bombay Stock Exchange websites enable you to check the status by entering PAN card and Client ID number.

Reasons for investment

People invest in IPOs for various reasons. While some look forward to earning short term gains during the listing, others want to get into a company’s ‘ground level’ to invest from the beginning and stick with it for the long haul.

Benefits

With IPOs, holding even a single share of the parent company is beneficial. You apply in the shareholder category having greater priority than a retail investor. You need to open a Demat Account before bidding in an IPO. Apply for it within the first two days of the bidding period for effective results.

How to open it?

With digitalisation and minimal paperwork, open a Demat Account online and save time. Initially, you stored physical receipts of shares exchanged, resulting in lengthy paperwork. The dematerialisation introduced in 1996 converted all physical share certificates into electronic forms to counter this problem.

The modern online account opening process is simple. Fill out the form digitally, update your mobile number and email ID, complete KYC compliance with a preferred DP, and open the account within an hour. Remember to pay the Demat Account opening charges to the broker, ranging from taxes levied by SEBI to operational fees.

Linking the account

Opening Demat is the first step to investing in securities in India. But you cannot tradewithout a Trading Account. Hence, opening both accounts with the same broker is advisable for fast and seamless transactions. Link them to your Bank Account for adding funds while trading.

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