7 Ways To Increase IPO Allotment Chances
Investing in an IPO: may be thrilling. It can yield significant cash gains in the future, perhaps several years. Furthermore, your financial support of a successful initial public offering (IPO) can help the business develop and offer innovative products and services.
. Apply with more than one demat account: Making many applications from different demat accounts is an additional method. Although you may submit several applications for an IPO, you may only use one PAN number per application. However, you might ask your loved ones to submit several applications for the same IPO on your behalf. Consequently, you can improve your odds of receiving at lean the initials one allocation by utilizing multiple demat accounts.
. Utilize within the initial 48 hours. You could notice that the IPO is open for three days while completing the application for the initial public offering. You can choose to apply for the application during the first two days in order to improve your chances of being allocated to the IPO. This is due to the possibility of technological issues on the last day if an excessive number of individuals apply in a hurry. In general, some investors wait until the very last minute to send in their application since it gives them a better idea of how the investors would first react to the initial public offering. That being said, you might want to reconsider waiting until the very last minute if your goal is to raise the likelihood of IPO allotment in a certain IPO.
. Always bid at the cut off prize: Assuming that an IPO has been launched, the price range for each share would be ₹100–110. Bidding at the cut-off price indicates your willingness to purchase at any price within the ₹100–₹110 range. Because of this, it's a good idea to choose a cut-off price while completing the application for an IPO.
. Avoid rushing at the last minute: A number of investors base their final day build placements on subscription levels in the High Net Worth Individual [HNI] and Qualified Institutional Buyer [QIB] categories. Some investors choose to hold off and observe how the HNI and QIB sectors purchase IPOs. However, you could have problems submitting your application if there is a technical issue. Furthermore, the IPO application may be submitted too late because the majority of banks do not accept applications after 4 pm.
Avoid Technical Issues: Applications for initial public offerings may be denied for technical reasons without the investor knowing about the mistakes. As of January 1, 2016, the Application Supported by Blocked Amount (ASBA) mechanism is the only way to submit an IPO application. Since most investors apply online, the likelihood of errors like misspelled names, inconsistent checks, or incomplete application materials is reduced. Applications may nonetheless be turned down for technical reasons. A wasted opportunity might arise from even a little inconsistency, such as different names on the PAN and bank account.
Invest in Parent Company Shares: A great way to improve your chances of getting an IPO allocation is to have a minimum of one parent or holding company share in your demat account. This qualifies you for the shareholder category, however, keep in mind that on the date of the Red Herring Prospectus, the parent company's shares need to be in your demat account.
This approach is only applicable if the parent company of the business that is about to go public has previously gone public and has a reserve for parent company shareholders. For instance, at Ujjivan Bank's just-completed initial public offering (IPO), 48 subscriptions were made in the retail category but just 4 in the shareholder category.
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