Can I Apply For IPO Without Demat Account
In recent years there has been an immense craze about the IPOs, amongst investors. The promise of significant gains at lower listing prices, probably, has attracted investors to Initial Public Offerings (IPOs). Many investors are now looking for an opportunity to apply for an IPO and make a profit from it. However, a common question is whether or not you can apply for an IPO without opening a Demat Account.
Ideally, all investors who want to invest in or trade stocks need a Demat Account, and the same goes for investing in the IPOs. All of your IPO share certificates are stored in an electronic or dematerialized format in these Demat Accounts, which you open with your depository participant (DP). This not only makes buying and selling IPOs, stocks, and other securities easier but it is now required for all stock market investors. But what if you want to apply for an IPO but do not have a Demat Account? In this article, we would find out that IPO investments are made without a Demat Account.
Initial Public Offering
A stock launch, also known as an initial public offering, is a public sale in which a company’s shares are sold to institutional and, in most cases, individual investors. An IPO is usually underwritten by one or more investment banks, who also arrange for the shares to be listed on one or more stock exchanges.
Staying invested in equities can be done in a variety of ways. Stocks can be purchased directly through stock exchanges, mutual funds, derivatives, and other means. Aside from these options, investors may be interested in another strategy to invest in potential businesses at relatively low costs. The IPO stands for Initial Public Offering (IPOs).
You can apply for an IPO without a Demat Account if you want to, however, because the stock market has gone fully digital and you can no longer maintain physical shares, it is quite difficult to do so.
How to Apply for an Initial Public Offering (IPO) Without a Demat Account?
It is possible to apply for an IPO without a Demat Account, but it is a lengthy process. In a nutshell, having a Demat account is convenient, if not required, when applying for an IPO. The Demat account becomes a requirement because it is only with a Demat Account that you will be able to store all of your securities.
The physical transfer of shares has also been prohibited by SEBI. As a result, a Demat Account provides security to your holdings and should be opened before submitting an IPO application. It is tough and cumbersome to apply for an IPO without a Demat Account. By following a few basic steps and keeping a few documents on hand, you can opt to simply open a free Demat Account:
- PAN card
- Aadhar card
- Bank Account Information
- Signature
Let’s take a look at how simple it is to apply for an IPO.
How can I apply for an Initial Public Offering (IPO)?
To apply for an IPO, you must first open a free Demat Account with a stockbroker. You can apply for an IPO either online or offline after you have successfully opened a Demat Account.
If you’re applying for an IPO offline, you’ll need to go to your stockbroker’s or bank’s nearest branch and fill out the ASBA e-Form, which you can readily download from the NSE website. Then, for the required fees, submit a cheque.
Following a successful IPO application, the required amount will be blocked in your account and unavailable for use until the IPO is allotted. Overall, ASBA is required for IPOs. Let’s take a closer look at how you can use ASBA to apply for an IPO now that we’ve discussed it briefly.
How do I apply for an IPO through the ASBA?
An Application Supported by Blocked Amount (ASBA) is an investor’s application that includes an authorization for Self-Certified Syndicate Bank (SCSB) to block funds available in the applicant’s Savings Bank Account or Current Account (other than Overdraft or loan accounts) to subscribe to an Issue up to the amount of the application money.
Through internet banking or a trading account, you can apply for an IPO at the issue price. After you apply, ASBA will block the amount of the IPO you applied for in your account (Application Supported by Blocked Amount). This signifies that the required amount will be held in reserve until share distribution. The Securities and Exchange Board of India (SEBI) has made ASBA a requirement for IPO applications. Until the finalization of allotment in the issue or withdrawal/ failure of issue, or withdrawal/ rejection of the application the requested amount is placed on hold in your account until the IPO is not allotted.
If you wish to apply for an IPO online, you must follow the instructions carefully:
- Log in to Choice India’s official website or open the Jiffy App to open a free Demat Account with Choice.
- Jiffy by Choice offers a separate section for IPO applications that makes applying for an IPO a cakewalk.
- Go to the section where you can apply for an IPO.
- Choose the IPO you want to apply for from the list of IPOs provided.
- Now enter the quantity, price, and your UPI ID in the application window.
- Go ahead and click the next button.
- You will be given instructions to block the specified amount in your bank account.
- That amount will be blocked in your account if you complete the task successfully.
If you don’t get the allocation, keep in mind that this amount is unblocked. It will be deducted only if you receive an IPO allotment.
ConclusionÂ
It is possible to buy an IPO without a Demat account. However, this is a lengthy and difficult procedure. Additionally, it is not a very safe or legal method in today’s contemporary digital milieu.
If you are successful in your application for an IPO, you will need a Demat Account to receive your shares if the IPO is awarded to you. Open a free Demat Account with Choice today and apply for an IPO with ease.
