If you’re new to IPOs, focus on three key aspects:

• Choosing the Right IPOs: Evaluate the company, sector potential, and credibility of the promoters before applying.

• Understanding Application Modes: Decide between offline and online application methods based on your comfort and account setup.

• Knowing How to Bid: Learn how IPO bidding works and whether you should choose a specific price or bid at the cut-off price.

Why IPOs are a Good Starting Point for Equity Investment

• IPOs are vetted by SEBI and investment bankers, ensuring regulatory compliance and basic due diligence.

• Companies typically leave room for listing gains, which can benefit first-time investors.

• IPOs help investors gain exposure to equity markets with relatively lower complexity compared to trading in the secondary market.

5 Key Things to Know as an IPO Investor

• Read the Prospectus
  Download the IPO prospectus from your broker’s or SEBI’s website. It includes:

  • Company financials

  • Promoter background

  • Legal obligations

  • IPO valuation details

• Understand Retail vs HNI Quota

  • If your investment is below ₹2 lakh, apply under the Retail Individual Investor (RII) category.

  • Higher chances of allotment as the logic is to maximize retail participation.

• Choose Your Bidding Price Wisely

  • You can bid within the price band.

  • If unsure, select the Cut-Off Price, meaning you agree to whatever final price is discovered.

• Select Online or Offline Application

  • Online is faster and efficient, especially if you have a trading, demat, and bank account linked.

  • Offline applications can be submitted physically through designated centers.

• Check Subscription Status

  • Real-time subscription data is available on the NSE and BSE websites.

  • This shows how the IPO is performing and may hint at how aggressively priced it is.

3 Reasons to Use the ASBA Facility When Applying for an IPO

• No Immediate Debit of Funds

  • ASBA (Application Supported by Blocked Amounts) only blocks the bid amount in your bank account.

  • The money is not debited unless shares are allotted, and you continue to earn interest on the blocked amount.

• Faster Access to Funds

  • No need to wait for refunds if you don’t get allotment.

  • Funds are unblocked quickly after allotment, improving liquidity.

• Efficient Fund Utilization

  • Since the block lasts less than a week, you can quickly reuse the funds for other IPOs or investments.

  • This lowers the opportunity cost of your capital.