This article will give you an idea about IPO i.e. (Initial Public Offer). When a company wants to enter in Stock Market, This can only be happen if the company offer it’s some share to the public and price of the share will be decided by the company. IPO is a process which allows retailers / People like you to buy those share in lots. In IPO you can place a bid to buy the shares and company will offer you those share. You need to have demat account to place a bid. In recent updates, you can place a bid and make payment through UPI. There is some conditions in allotment:
1- If the IPO is oversubscribed
If the IPO is oversubscribed means the company has got more buying than its offering share, The company will do a lottery system for the allotment of the shares. So you may get the company’s share on your demat account. There is chance of not getting the company’s share in IPO process. But you can buy the company’s share after the listing in stock market. When you place a bid, the required money will get blocked in your bank account and if you got the allotment of shares, the money will be debited from your bank account. If you did not get the allotment, the money will be credited to bank account.
2- If the IPO is undersubscribed
If the IPO is undersubscribed means the company has got less buying than its offering share. The chance of getting allotment is very high in this case. You can buy the more company’s share after the listing in stock market. When you place a bid, the required money will get blocked in your bank account and if you got the allotment of shares, the money will be debited from your bank account. If you did not get the allotment, the money will be credited to bank account.
- Note:-
- You should have a demat account for placing a bid in IPO.
- You should have the required money in your bank account.
- You can not place a bid, if you have money in your demat account not in bank account.
- You should place a single bid from one PAN account. If you have more than one demat account linked to one PAN then you should place single bid because if you place the multiple bid from different demat account that is linked to one PAN your all bids will get rejected.
- You can place more bids with different demat account that is linked to different PAN. It could be your wife’s demat account, or anyone in your family.