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No. Only such companies who meet the entry norms /eligibility criteria prescribed by SEBI, which are also aimed at investor protection.
The Securities and Exchange Board of India (SEBI) allows the following categories of investors to bid for shares during an IPO process
Qualified institutional Buyers (QIBs): QIBs include commercial banks, public institutions, mutual funds, foreign portfolio investors registered with SEBI and certain other categories of institutions as defined by SEBI.
Anchor investors: A certain part of the IPO can be allocated by the issuer on a discretionary basis to identified buyers in the QIB category. Such QIBs are called Anchor Investors. They are allowed to purchase up to 60% of the shares reserved for the QIBs. Their minimum bid size needs to be INR 10 Cr and 50% of the shares allotted to them get locked in for 90 days and the other 50% for 30 days.
Retail investors: Retail investors can invest up to Rs.2 lakhs in each new IPO. Companies must allocate a minimum of 35% (or 10% depending on financial track record) of the issue for retail investors under a quota. SEBI has also mandated that if the offer is oversubscribed, all retail investors are to be issued at least 1 lot of shares. If it is impractical to distribute one lot per investor, a lottery system will be used to allocate the IPO shares to the general public and in that case each successful allottee gets at least one lot.
High-net-worth individuals (HNIs) or non-institutional investors (NIIs): The investor is automatically categorised as an HNI if they opt to invest above Rs.2 lakhs in the IPO. The difference between a QIB and an NII is that the NIIs are not required to be registered with the SEBI.
A Demat Account: It is vital to have a Demat account for an IPO investment. ...
Trading Account: A trading account is mandatory before applying for IPO online. ...
Bank Account: You must have a bank account to pay for the applied shares. ...
UPI ID: You can link your UPI ID to your bank account.
Documents like PAN card, Aadhaar card, bank details, and a Demat account are usually required.
If an investor wants to place bids for less than Rs.2 lacs, he needs to apply in the Retail segment. If an investor wants to bid for more than Rs.2 lacs, he needs to apply in the HNI segment.
You need to download the ASBA form to apply for the IPO. There are two ways to get ASBA form − a form provided by the broker you apply through. And secondly, downloading a blank form from the NSE or BSE website.
As per current norms, the equity shares issued in IPO / FPO have to be listed, on or before the 3rd working day after the issue/ offer is closed
A lock-in period of 90 days is applicable for anchor investors on 50% of allotted shares from the date of allotment. For the remaining 50% of shares allotted, a lock-in duration of 30 days is applicable. For non-promoters, this lock-in period has been reduced to 6 months from 1 year.
Yes, the investor can revise or withdraw the bids after application. It can be done only once the order is executed. The investor needs to go to the IPO Order Book and select the Transaction Id and then click on Withdraw Application/ Revise Bid. The application in the non- institutional category cannot be withdrawn but can only be revised. However, this needs to be done during the issue itself and cannot be done after the issue is closed. In case of ASBA applications, for upward revision of bid, additional lien will be marked to the extent of incremental amount. However, in case of downward revision, differential money blocked earlier will not be released. Such amount, if any, will be released after allotment.
You can take the following steps to increase your chances of allocation -
Apply from multiple demat accounts.
If there is a price band then try bidding at the highest price.
Make sure you apply in time i.e. before 4 PM of the final day.
If the company going public has a parent company, then you can invest in the parent company and then apply through the 'Shareholder' category. Then your chances of allocation will increase
In cases where issue is over-subscribed, bidding for more than 1 lot from the same account doesn't help as maximum of only 1 lot can be provided against each application. However, if the investor applies for 1 lot from different accounts, the probability of allocation of shares increases.
The investor can check the allotments status of an IPO once the allotment process is completed. The investor can either check it on the Website of BSE or on the website of the Registrar appointed for the issue.
Click to go the website of BSE >>Enter your application Number >> Enter your PAN Number >>Click on Search button
Option 2 The investor can also check the allotment status on the Website of the Registrar appointed for the issue.
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It can be done in 3 ways through the website of the Registrar:
Costs may include brokerage fees, Demat account charges, and transaction charges.
The offer price of a share is the price at which the shares were purchased in the IPO process. Once the shares are listed on the stock exchange, the company goes public. The opening price at which the share debuted on the stock market is known as the IPO listing price. While the underwriting investment bank decides the offer price based on a vast array of commercial and operational factors, they cannot control the IPO listing price.
How is the listed price decided? – Market sentiments play a critical role in deciding the listed price. The principle of demand and supply is the key here. If sufficient buzz had been created regarding the IPO and the demand from investors is high, then it is quite likely that the listed price will be higher than the offer price. In the case of under-subscription or low demand, the listed price may fall short of the offer price leading to a loss to investors.
Shares are transferred to your demat account just before the day of listing of the IPO shares at the stock exchanges.
Credit to your demat account does not happen, if a) Your demat account is not active and there is a bar on accepting credits to your account. b) Your demat account number is not accepted by the system as a result of mismatch of data. c) Your demat account as provided in bid file is erroneous
Ensure that your DP account is active and is in ready state for receiving credits. Provide a copy of your Client Master to Registrar to enable upload of your allotted shares in your account. Copy can be sent by Fax/Scanned image.
In case of online IPO application the deadline for applying in an IPO on its last day varies from broker to broker. Some broker stop accepting application by 1 PM while other gives you time till 3 PM.
In physical IPO application through your broker, it can be 5 PM on closing day.
Investors can modify or cancel an application within the bidding period. Here is the process to follow.
The investor has to fill in a revision form to modify the application and give it to the syndicate member.
To withdraw IPO application, go to the order book and select the IPO to cancel. The bank will release the blocked amount within two working days.