Apply for an IPO — Process explained
Market enthusiasts who intend to gain profits through IPO are growing day by day. But some of them are newbies still searching for legitimate way to get knowledge of the IPO process.
This made me to write a blog which explains the complete process of an IPO in depth.
One can see the scheduled IPOs in their respective broker applications. I will consider GROWW application.
On GROWW you can find IPO tab and number of IPOs open as shown below.
Now, there are basically 5 phases of an IPO and lets understand each of them step by step.
Stage 1: Pre-apply or Apply
During this phase the applicant can actually submit his application for an IPO based on the lot size and the minimum investment by clicking Pre-apply for IPO button or Apply for IPO button.
Stage 2: UPI request generation
On applying for an IPO you get redirected to the screen where you have to choose the lot size and the UPI to which the scheduled autopay request for amount deduction has to be sent.
Stage 3: UPI request approval
After successfully entering the UPI pin, the request to autopay the amount gets generated within 24 market working hours. And you have to approve the payment in your UPI Application. Now the necessary amount will be blocked from your bank account and will be released/deducted based on the IPO announcement status as explained in later stages. Applicant will receive an SMS from the UPI application asking him to approve the request.
Stage 4: IPO announcement —
At this point, the applicant gets to know if the shares have been allotted or not. And below are some sub-steps after IPO allocation is announced. The shares allotment status can also be viewed through the registrar agency through which the company has bound with.
Stage 4.1: Shares Allotted
If shares are allotted to the applicant, then the necessary amount will be deducted via the UPI which applicant configured earlier when applying for an IPO. You will receive an allotment successful SMS on your registered mobile number as shown below.
Stage 4.2: Shares Unallotted
If shares weren’t allotted to an applicant, then the blocked amount will be released within a market working day. You receive a non allotment SMS as well to the linked mobile number.
Stage 5: IPO Listing
On this day the IPO gets into market for trading. The listing price per share gets declared. For long term gains, you can keep the allotted shares or can sell them immediately after IPO gets listed and you find a suitable price per share.
I have tried to put all the steps together to help you guys understand the IPO process. You can comment on this blog and ask your doubts. Also, you can ask me to update the mistakes if there are any.
Happy Trading! Hope you all make profits and share some with me :P
