IPO stands for Initial Public Offering (IPO). It is the process of releasing shares or a business to the public through stock market listings. The purpose behind this activity to raise funds from investors. A private company that has few shareholders shares the ownership by turning to the public by offering its shares. Through the IPO, the company gets its name listed on the stock exchange.
A trader or investor can choose to invest in an IPO through a stockbroker. Some of the leading stockbrokers in India are Zerodha, Upstox, 5Paisa, Angel Broking, Share khan, and others. Among them, Zerodha is considered to top the list due to its competitive brokerage structure. If you own a Zerodha account and want to invest in an IPO, this article is meant for you. This article would help you invest in an upcoming IPO through a Zerodha broker.
About Zerodha
Whenever it comes to listing the top discount brokers in India, Zerodha tops the list. Being a leading discount broker in India, Zerodha is primarily known for its competitive brokerage and outstanding services. This is why it remains the most preferred choice of traders and investors across the nation. Started its operations in 2010, Zerodha is officially recognized as India’s first and most prominent discount broker. It was set up by Nithin Kamath who had worked as a stock trader before setting up his own broking house.
How to apply for an IPO with Zerodha?
First and foremost, you would need a Zerodha account. If you haven’t opened a Zerodha account yet, the first thing to do is to open an account online. Today, it doesn’t take more than just a few minutes to get your account operational, account opening process is described in our Zerodha Review.
The next thing to do is to secure a UPI account. This is because UPI is considered a quicker and easier way to make payments. Some of the leading UPI options are Google Pay, Phonepe, BHIM app, and lots others.
Steps to apply for an IPO with Zerodha Account
Here are the steps you need to follow to apply for an IPO with a Zerodha account
- Visit the Zerodha IPO page.
- On the top menu band, jump to Portfolio – > IPO
- From here, you can find the list of the running IPOs.
- Choose the IPO you want to apply from that list and click on ‘Place bid’.
- A pop-up screen will come up with IPO information. These details include things like issue date, issue price, market lot, discount (if any), minimum order quantity, etc.
- Now, feed in your UPI id. Make sure to choose the correct bank account.
- Put your bid by mentioning the ‘Quantity’ and ‘Bid price’.
In terms of quantity, the mentioned figure should be the minimum permissible limit. In the case of ‘bid price,’ you can enter any price between the presented issue price range. Anyhow, to get the best likelihood of getting an allotment, it is suggested to use the ‘Cut-off’ price.
8. After mentioning the details, click on the ‘checkbox’ stating that you’ve understood the prospectus and you’re are a qualified UPI bidder as per the applicable requirements of the SEBI.
9. Lastly, reconfirm the details and click on ‘Submit.
10. Also, if you want to make any changes if the bidding at a later stage, just click on ‘Bid details’ on the IPO page and make the changes.
Once furnished, you’ll be asked to complete the “UPI Mandate” on your UPI app.
Please keep in mind that sometimes it may take a few hours to obtain the UPI mandate request. However, it is not the case always as it can also be quick and one may get the payment request on the UPI app as soon as the application is submitted on the Zerodha Console. Accept the request once you receive it to complete the process.
Once the payment request is approved and accepted, your UPI app will reserve the IPO funds in your bank account till the date of allotment. The person will get an SMS from the exchange once your application is submitted successfully.
Once the allotment of IPO shares is done, the amount will get debited from the account and shares will get credited to the Demat account. Contrarily, if shares are not allotted, then blocked funds are unconfined on the payment date.
That’s done. This is the precise step-by-step process one needs to follow while applying for an IPO with Zerodha Account by the best stock broker in India.
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FAQs
What is an IPO?
The procedure of Initial Public Offering (IPO) converts a privately-held company into a public company. This process also unravels an opportunity for smart investors to earn a smart return on their investments.
How many days does IPO remain open for the public?
As per Clause 8.8.1, the Subscription list for public issues shall remain open for minimum 3 working days and not more than 10 working days. In case of Book built issues, the minimum and maximum period for which bidding will be active is 3 – 7 working days extensible by 3 days in case of a revision in the price band.
What information should I keep after I submit the IPO application form?
If you are applying for an IPO, make sure you retain the following information for future correspondence with the company or registrar of the issue.
- Application form photo copy
- Cheque photo copy
- Application number in case of online IPO submission
What is ‘Market Lot Size’ and ‘Minimum Order Quantity’ for an IPO?
Minimum Order Quantity refers to the minimum number of shares an investor can apply while bidding in an IPO. If an investor wants to bid for additional shares, they can apply in multiples of IPO market lot (lot Size or IPO bid lot) of shares.