Every year there is a surge of IPO launches in India with unicorns, government companies and other start-ups entering the market. Initial Public Offering is the process of offering shares to the public for the first time to raise money from the open market. Investors had to subscribe to these shares for getting an allotment to these IPO. So, getting a piece of the pie in the good IPO’s is difficult for investors as there is oversubscription of these shares.
How to apply for an IPO without a Demat Account
Demat account is a necessity to invest or trade in shares. You can apply for an IPO without a Demat account but you need a depository ID for the same. Through Demat account you can easily invest in an IPO through simple steps by selecting the IPO in your broker app, entering the lot size, mentioning price and making payment for allotment.
Even though you can apply for an IPO through ASBA without a Demat account which is a little tricky. ASBA (Applications Supported by Blocked Amount) is a method of blocking a certain amount in your savings or current bank account for IPO allotment. ASBA has been made a mandatory requirement for all the IPO applications by SEBI. It can be done using both online and offline mode.
Steps to apply for an IPO in an online mode
Firstly, go to your bank’s online portal or app which has an ASBA facility and login your details.After login, go to the “Investment Section” or “IPO application” .Then, enter your depository details such as DP ID which you can get instantly from any depository by submitting documents such as PAN details, photographs, proof of address and opening fee. You can skip the ‘beneficiary account number' in the application for now.Select your bank account number and complete the verification process.Now, you can select the particular IPO, enter the quantity of shares and mention the bid price with a maximum of 3 bids.After this you will receive a notification to block with the highest of 3 bids in your bank account and click proceed by filling your UPI ID.
Steps to apply for an IPO in a offline mode
You can visit your nearest bank branch and fill in the necessary details in the ASBA e-form which is available on the NSE website.After that submit the cheque for the desired amount and that money will be blocked in your bank account.
If you get the allotment of shares in the IPO, then only it will be debited from your bank account, otherwise it will be unblocked from your account. In the meantime, you will be able to earn the bank interest on that amount till allotment.
Conclusion
You can apply for an IPO without a Demat account but if you are allotted with the shares then you need a Demat account to store them in an electronic form as holding share certificates in physical form is not allowed by the SEBI. Therefore, the method of applying without a Demat account is not a very good option. You should be ready with a Demat account and trading account if you want to trade in these upcoming shares.
0
Sign in to leave a comment.