All the investors are called shareholders of the company. A dividend is paid to them in proportion to their share. A retail investor can invest up to Rs 2 lakh in an IPO at a time.
There is talk of LIC’s IPO everywhere these days. The wait for LIC IPO is about to end. LIC’s IPO is opening for investors on May 4, while for anchor investors it was opened on Monday, May 2, which has been taken by the investors. After hearing the discussion of IPO again and again, this thing must also be roaming in your mind what is this IPO and how do you apply for it? Let us explain this to you in detail.
What is IPO?
There are many companies operating in the country. Many of these companies are run by family members or some shareholders together. Every company has shares of capital investment. When such companies need capital, they first get themselves listed in the Securities and Exchange Board of India (SEBI) and then raise capital from the market. We issue an Initial Public Offer ie IPO.
In order to list itself in the stock market, a private company brings an IPO, through which the company allots shares of the company to a large number of public, investors, and others. In this situation, the company does not only belong to the people running it but to all those who are allotted IPO. The shares which are allotted in IPO are listed on stock exchanges like NSE or BSE. Where investors can buy and sell these shares comfortably. All investors are called shareholders of the company. A dividend is paid to them in proportion to their share.
How to apply?
If an investor wants to invest in IPO, then the most important thing is that he should have a Demat account. To invest, an investor should start by logging into the trading app or mobile application of the broker and go to the ongoing IPO section. Select Investor Type and IPO to apply. Enter the number of shares and the bid price. UPI ID will also have to be entered.
What is important
- demat account
- trading account
- Mobile number linked to a bank account
- UPI ID
Also, know that
a retail investor can invest only up to Rs 2 lakh in IPO at a time. After investing in an IPO, the allotment of shares takes place after the closure of the IPO. After the closure of the IPO, all the bids are evaluated and if any bid proves to be invalid, then in this case the IPO is not allotted. If an IPO is receiving bids for fewer shares or the same number of shares as compared to the total issued shares, then all the investors are allotted shares according to their bids.