If you’re new to IPOs, focus on three key aspects:
Choosing the Right IPOs: Evaluate the company, sector potential, and credibility of the promoters before applying.
Understanding Application Modes: Decide between offline and online application methods based on your comfort and account setup.
Knowing How to Bid: Learn how IPO bidding works and whether you should choose a specific price or bid at the cut-off price.
Why IPOs are a Good Starting Point for Equity Investment
IPOs are vetted by SEBI and investment bankers, ensuring regulatory compliance and basic due diligence.
Companies typically leave room for listing gains, which can benefit first-time investors.
IPOs help investors gain exposure to equity markets with relatively lower complexity compared to trading in the secondary market.
5 Key Things to Know as an IPO Investor
Read the Prospectus
Download the IPO prospectus from your broker’s or SEBI’s website. It includes:Company financials
Promoter background
Legal obligations
IPO valuation details
Understand Retail vs HNI Quota
If your investment is below ₹2 lakh, apply under the Retail Individual Investor (RII) category.
Higher chances of allotment as the logic is to maximize retail participation.
Choose Your Bidding Price Wisely
You can bid within the price band.
If unsure, select the Cut-Off Price, meaning you agree to whatever final price is discovered.
Select Online or Offline Application
Online is faster and efficient, especially if you have a trading, demat, and bank account linked.
Offline applications can be submitted physically through designated centers.
Check Subscription Status
Real-time subscription data is available on the NSE and BSE websites.
This shows how the IPO is performing and may hint at how aggressively priced it is.
3 Reasons to Use the ASBA Facility When Applying for an IPO
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No Immediate Debit of Funds
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ASBA (Application Supported by Blocked Amounts) only blocks the bid amount in your bank account.
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The money is not debited unless shares are allotted, and you continue to earn interest on the blocked amount.
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Faster Access to Funds
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No need to wait for refunds if you don’t get allotment.
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Funds are unblocked quickly after allotment, improving liquidity.
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Efficient Fund Utilization
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Since the block lasts less than a week, you can quickly reuse the funds for other IPOs or investments.
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This lowers the opportunity cost of your capital.
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