Apply for IPOs

Initial Public Offering or IPO is a process where a private company sells its shares to the public for the first time.

IPOs are held to raise equity capital from the public to fuel the company's growth and expansion. This also gives investors an opportunity to invest in a company's shares at the ground level. It's a significant milestone for a company, transitioning from being a private entity to getting public ownership.

However, it's not without risks - not every IPO is a guaranteed success story. You must understand that, majorly, this is like a lottery game. Your money will be blocked until you actually get the shares. So, instead of just following the trend, you must learn how to set your financial goals and make smart money moves.

A company is considered private before an IPO. Its shareholders are usually a small group, including the people who started the company, their friends, and early investors like venture capitalists.

These early participants provide the necessary support during the company's budding phase.

But growth requires capital. Hence, an IPO helps the company get a platform to raise substantial funds from a broader audience. It's not just about the money, though. Going public increases a company's visibility and credibility, potentially leading to new business opportunities and partnerships. Plus, there's a level of prestige associated with being listed on a stock exchange.

You can go to the INDstocks platform, select the Orders tab, and click on the particular IPO to which you applied. A status page will open up which will provide the latest update of your IPO. If you have been allotted, the same will be updated on the status screen.

You can find it by following the above steps. If the allotment is successful, the same information will also be present in the "My IPOs" section inside IPO tab.

One can sell the IPO shares once they have successfully received the allocation and the shares get listed on the stock exchanges like NSE and BSE.

Here's the breakdown of the key differences between retail quota and HNI quota in IPO applications:

Investment amount

1. Retail Quota: This is for regular investors applying for an amount less than Rs. 2 lakhs.
2. HNI Quota (Non-Institutional Investors): This is for investors applying for an amount of Rs. 2 lakhs or more. HNIs further have subcategories: 

• Small HNI (SHNI): Applies for Rs. 2 lakhs to Rs. 10 lakhs.
• Big HNI (BHNI): Applies for more than Rs. 10 lakhs.

Allocation Probability

1. Retail Quota: Generally has a higher number of applicants due to the lower investment barrier. This can lead to oversubscription of IPOs and a lower chance of getting share allotment.
2. HNI Quota: Typically has fewer applicants compared to retail. This can lead to a higher chance of getting some share allotment, even in oversubscribed scenarios. However, it's not guaranteed.

When a company decides to enter the public market through an Initial Public Offering (IPO), it opts for one of two primary methods: the Fixed Price Offering or the Book Building Method.

1. Fixed Price Offering: Here, everything is transparent from the get-go. The company sets a definite share price (e.g., ₹75 per share) before the IPO subscription begins. It's a common route for SMEs, primarily due to smaller issue sizes.

Key Aspects of Fixed Price IPOs:

• The IPO prospectus outlines the IPO share price and other details.
• This prospectus is registered with the Registrar of Companies before the IPO opens.
• At least half of the offering is allocated to retail investors.
• Subscription windows are brief, typically between 3-10 business days.

So, if a company sets its IPO price at ₹150, that's what you will bid. There's no room for guesswork.

2. Book Building Method: This method offers more flexibility. The company provides a price range (like ₹60 to ₹75 per share), but the final IPO share price isn't decided until after the bidding process, based on the demand observed.

Key Aspects of Book Building IPOs:

• The process begins without a set price.
• A price range is announced before the IPO, offering a guide for potential investors.
• The offering period is usually 3-7 business days but can be extended if the price range shifts.
• BSE and NSE facilitate online bidding, simplifying participation.

For example, if a company's price range is ₹601 - ₹650 for its million shares, investors can bid within this range or at a cut-off price. The final share price is determined after assessing the demand.

A 'bid lot' is the minimum number of shares you can apply for in an IPO. The company sets these 'Lots,' and you can apply for more than one.

A company can set its IPO price in two ways: Fixed price and Book Building. With 'Fixed Price,' the cost is known upfront. 'Book Building' involves setting a price range and then finalising the price based on investor demand.

Under-subscription of an IPO happens when there are fewer investors interested in buying the shares than the number available. This means the shares offered in the IPO are not fully bought by investors.

The opposite of under subscription. Over-subscription of shares means that the demand from investors exceeds the number of shares available during an IPO. This means more people want to buy the shares than there are shares available.

A quick sell-off strategy where investors sell their new IPO shares within a short period, often within the first few days, aiming for fast profits.

For any IPO, the market hours are from 10 am to 5 pm. If you placed your order during this period, in most cases, you will receive a mandate request in your payments app within 15 minutes. 

IPO applications are not processed in real-time and can take several minutes to a few hours, as the exchange may not accept applications after market hours.

But if you place your order on a non-market hour or holiday, you will receive a mandate request on the next market opening date anywhere from 10 am to 10:30 am.

In most cases, Exchange sends the data of the Mandate approval instantly, but sometimes, due to the issue at Exchange, it may take up to 24 hrs. But don't worry, your order will be considered for allotment in such cases.

Post allotment date, it usually takes 2 to 3 days for Exchange to send the data of IPO allotment to INDmoney.

But during this time, if you need to verify your allotment status, you can follow the below steps:

(1) Complete one-time registration on this official Exchange website

(2) Once logged in, select the IPO Symbol for which you want to check the allotment.

(3) Enter your PAN number.

(4) Put in the application ID (You can get to know about the application ID from the status page).

(5) On Clicking "Get Data" you will be able to check the allotment details.

At the moment, INDmoney does not support investing in SME IPOs, but we are coming up with this feature really soon.

Generally, the amount will get unblocked within 2 days. In a few cases, it may take up to mandate expiry date which can be from 5 to 10 days post shares not allotted. If it is more than 10 days, please contact your bank to unblock the amount.

Users can apply for an IPO for up to 5 lakhs on the INDmoney platform.

1) Retail order: Up to Rs 2 lakhs

2) HNI order: From Rs 2 lakhs to Rs 5 lakhs

Look for an IPO or investments section on the INDmoney platform, where upcoming IPOs are usually listed.

An underwriter is usually a financial entity, like a bank or broker, tasked with helping the company in its IPO process.

An issuer is the company or firm that's offering its shares to the public, to gather funds for its operations.

The Floor price is the lowest price you can bid for when you apply for an IPO. It's the bottom number in the company's set price range.

Issue price is the final price set for the shares after the IPO application period ends. It can vary for different types of investors.