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You must have heard about the rising investment wave in IPOs, with subscriptions going over 10 times. If you also want to take part in this magnum IPO launch every other day, then you need to choose a stockbroker who easily helps you in placing the bids and keeps you informed about all the IPOs. One such stockbroker that clearly stands on these criteria is SMC Global Securities. Let’s discuss the meaning of IPO and how you can invest in an IPO.
What is an IPO?
IPO (Initial Public Offering) is a way through which a private company lists its shares on the stock exchange for the very first time. It helps the companies in raising capital from the general public to expand their business and let go of their borrowings.
By investing in an IPO, you will get a chance to be a shareholder of a company that has a strong business model and holds an expectation to reach new heights in the future. You get a chance to invest in upcoming growth stocks at a lower cost and earn higher gains after listing.
Steps to Invest in an IPO
The main idea behind an IPO is that placing the bid is in your hands but the allotment is decided by the company. The window for bidding is open only for 3 to 10 days, so you need to have information at the very first speed. The steps to place your bids and invest money in an IPO are:
Open your Demat Account
Firstly, you need to open the demat or trading account with SMC which is ready to invest within a few minutes. A demat account is a necessity because once you get the allotment then the shares will be directly credited to your account.
Check the Full List of IPO
SMC Global Securities provides an up-to-date list of open, upcoming, and currently listed IPOs. This means all the details are handy with you. With so many IPOs coming every month, it is difficult to keep track of all of them and SMC will send you notifications.
Select the Right IPO
In order to select a suitable IPO, you can go through the company’s red herring prospectus. Here, you will get a detailed description of the company’s business, financial position, and the purpose of raising the money. For easy analysis, you can also check the SMC recommendations or you can read the detailed SMC Global Securities Blogs on IPOs.
Place the Bid
After selecting the IPO in which you want to invest, place the bid by simply clicking on the “Apply” button. Enter the amount at which you want to buy the share and the suitable lot size. In the end, fill out the application form to block your funds. Now, you can directly pay the amount through your UPI ID.
Allotment of Shares
On the allotment day, you will get the shares fully, partially, or zero. The allotted shares will be credited to your demat account and the amount is deducted from the block funds. If you get a partial or no allotment at all, then the block funds will be added back to your bank account.
Conclusion
An IPO is a way to invest in a company that is going public for the first time. With the premium listing, you can earn great returns in the short and long run. To invest in an IPO, you need to open a free demat account with a reputed stockbroker like SMC Global Securities. Finally, select the IPO and place your bid in a few clicks.
About the Author: I am Sheetal Goel, working as a content writer at SMC Global Securities. I hold 5+ years of experience in financial research and writing. As an Economics graduate and MBA (Finance), I possess the right skills to add value to my work and make finance easy for the readers.
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