In Fixed Price IPO, the company fixes the issue price at which the initial sale of the share offering is done.
In a book building offer, a price band is offered by the issuer. The lowest share price is called the floor price and the highest share price is called the cap price. The investors can bid on prices between this price band.
Additional Read:- How To Open Demat Account?
You need to follow some steps before investing in IPOs. These steps are as follows:
- Make the Decision:
The first step is to decide the IPO in which you want to subscribe. You can make a rational decision by analyzing the Draft Red Herring Prospectus of the company that is offering the IPO. The prospectus of the company will allow you to make an informed decision.
- Arrange for Funding:
The next step in the process is to arrange funds for the IPO. The investor can utilize his/her savings to subscribe to a companyâ€™s IPO. HNI clients can avail IPO financing through us to increase their quantum of allotment during IPO.
- Get a Demat Account:
A Demat account is the most important requirement to apply for an IPO online. The Demat account holds the shares and other financial securities electronically. Bajaj Finance Securities Ltd (BFSL) offers the facility of opening the Demat Account online. It is a 100% paperless process. BFSL offers IPO application through UPI ID, without any paperwork.
- Applying for IPO:
To apply in IPO, you need to have a Demat Account. You can apply though our platform even if you have demat account with any other stockbroker. Just visit https://ipo.bajajfinservsecurities.in/ and fill the details.
In case you have an account with us, you can apply swiftly with the below steps:
- Visit https://ipo.bajajfinservsecurities.in/
- Enter Client Code & click Proceed
- Validate OTP
- Select the Company in which you want to bid
- Select the number of shares
- Enter UPI handle details
- Tick the checkbox to agree to terms & conditions and submit the application
Note that: It is mandatory to approve the block mandate else your IPO application will get rejected. In some cases, there may be some delay in the request to appear on your UPI app.
- Bidding Process:
The application for an IPO is made through the bidding process. The process considers something called the â€œLot Sizeâ€ specified in the companyâ€™s prospectus. The Lot Size is the minimum number of shares for which an investor has to apply for in an IPO.
A price range is pre-decided and investors have to put the bid within the price range. The funds are required to be blocked while bidding. The amount deposited in the banks for IPO generates interest until the process of allotment is started.
- Allotment of shares
The final step is allotment. If the demand for the shares surpasses the number of shares offered, one may receive lesser number of shares than the applied quantity. The amount for which the shares have been allotted gets debited from the blocked amount while the remaining is released. After the allotment of shares, they are credited to the Demat account of the investor. Finally, when the stocks are listed in the share market, investor can sell his holdings.
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