How to apply for IPO in retail category? Which categories apply in IPO? How to Apply IPO in Retail Category?How to apply for IPO in retail category? Which categories apply in IPO? How to Apply IPO in Retail Category?

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  In the last few years, the trend of retail investors investing in IPOs has increased a lot. IPO subscription has gone up to 70 to 100 times. Many people have opened demat accounts just to invest in IPOs. The number of demat accounts has crossed 100 million in this year 2022. The listed stocks after listing have also given a lot of profit to the people, many stocks have doubled on the day of listing. Getting an IPO after being oversubscribed has become a matter of luck. In this blog, we will know how a retail investor can apply in IPO and which categories apply in IPO. 

A retail investor can apply in IPO with an amount of up to 2 lakhs. This application can be made online from the ASBA account. Your money in ASBA will be debited only after receiving the shares. If the shares are not allotted then the amount which is blocked after the IPO application is released. 

Let us know how to apply for IPO online. 

  • Login to Online Banking. If we take this example of State Bank of India, then after login, click on e-services and open it. 
  • Open IPO (Equity / Rights) by clicking on Demat Add ASBA. 
  • After this, will OK the term and condition. After selecting Individual, will confirm after filling the requested details. After applying, the amount of lots for which you have applied will be blocked in your bank account. 

How many types of investors apply for IPO? 

Retail Individual Investor - Retail Individual investors (RII)

  • Citizens of India, Hindu Undivided Family (HUF), and NRI can invest up to 2 lakh in this category. 
  • 35% of the total IPO is reserved for this category. 
  • The application for IPO would have been in lots. The number of shares will depend on the lot. 
  • Investors in this category can bid at the cut off price and after applying can also withdraw their bid before allotment. 

Non- Institutional Investor -NON-INSTITUTIONAL INVESTOR (NII)

  • Investors who invest more than 2 lakhs come in this category. Which includes Citizens of India, Hindu Undivided Family (HUF), NRI and Trust. 
  • 15% of the total IPO is reserved for investors in this category. 
  • Investors in this category cannot bid at the cut off price and after applying cannot withdraw their bid before allotment. 

QUALIFIED INSTITUTIONAL BUYER (QIB)

  • In this category, Foreign Portfolio Investor (FPI), Mutual Fund (MUTUAL FUND) and PUBLIC FINANCIAL INSTITUTIONS apply, which are registered under SEBI. 
  • Investors in this category also cannot bid at the cut off price and after applying cannot withdraw their bid before allotment. 

What are the things to keep in mind before applying for IPO?

  • Do not apply for IPO in more than one category. If you apply in both retail and NII category then it will be rejected.  
  • Apply only once for one IPO from one demat account. If you apply twice for one IPO from one demat, it will get rejected.  
  • Never apply on tip or someone's advice, do your own research first. 
  • Do not apply for IPO of loss making company, your money may get stuck by doing this. 
  • Don't apply in car IPO by taking loan. Only that money should be invested in the share market which is not needed for a long time.  
  • If you are applying only for listing gain , then check the gray market premium along with the financials of the company.
  • If you want to know about the company in detail then read the Draft Red Herring Prospectus (DRHP). Any company files DRHP before applying IPO in SEBI.  
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