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Trade Smart Online IPO Review


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Trade Smart online is a Mumbai based discount broker. It is a subsidiary of VNS Finance & Capital Services Ltd. The company offers trading services in equity, commodities, currency, and derivatives etc., to retail customers.

Trade Smart Online leverages technology to offer its various services. It is a complete online brokerage company that enables its customers to trade via personal computers and mobile phones.

Initial Public Offer (IPO)

IPO is the process through which a company offers its shares to the general public for the first time and gets listed on the stock exchange. The company sells its shares to raise funds by inviting institutional and retail investors to invest in the company and become shareholders.

Both private and government companies have to take the IPO route to sell its stocks for the first time and raise funds to finance its various business objectives like repayment of debts, execute expansion plans or for general corporate purposes.

Based on pricing, IPOs are of two types: Book Built Issue and Fixed Price Issue.

In the Book Built Issue, the company fixes a price range and the investors have to bid within that price range. The actual price of the share is fixed at the time of allocation and shares are allocated accordingly.

In the fixed price issue, the company fixes the price and there's no bidding involved. The allocation is done based on a formula and lottery system (if the need arises due to overbidding).

IPOs have a bidding window wherein investors can bid. The shares are available in lots as decide by the company. Each investor has to bid for at least 1 lot.

IPOs have reservation or quota for each type of investors as Retail Individual Investors (RIIs), Non-Institutional Investors (NIIs) and Qualified Institutional Buyers (QIBs) in the ratio of 35: 15: 50 respectively. Some companies offer a discount to retail investors.

On allocation, the shares are credited in your Demat account and will be eligible for trading from the listing day.

Trade Smart Online Customers - Apply in an IPO

Trade Smart Online doesn't offer IPO application services to its customers. Trade Smart Online customers, who wish to apply for an IPO, can do so through 3 ways:

  1. Use their existing bank and apply for IPO via ASBA. The process to apply for IPO through net banking ASBA is simple:
    • Visit the bank's website and log in to the net banking
    • If you are doing it for the first time, then you have to register as an IPO applicant by providing demat account details
    • Once registered, go to the IPO section, and select your choice from the list of IPOs available
    • Enter the details of your Demat account, select the investor category, price and number of lots you wish to apply
    • Confirm and submit your application

    The application money will be blocked in your account after the application. So please ensure that you have sufficient funds in your account.

    The blocked money will be debited from your account if you are allocated shares else it will be released after the allotment process. The blocked money will earn interest as per the bank's policy.

  2. Open another trading account and demat account with traditional brokers like HDFC Securities, ICICI Direct, Kotak Securities and Axis Direct etc., who offer IPO application services to its customers.
  3. Download the IPO forms from NSE, BSE or IPO's lead manager's website, fill it and submit it at the designated centers provided in the form along with the cheque for application money.

FAQ's

  1. I have an account with Trade Smart Online. Can I apply in IPO?

    No, you can not apply in IPO using the Trade Smart Online trading account. However, you can use the net banking services of your bank and get the shares, if allocated, credited to the Trade Smart Online's Demat account.

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  2. Why doesn't Trade Smart Online offer IPO services?

    Trade Smart Online is an online discount broker that runs on a low margin business model and leverages technology for trading operations. They offer low brokerage services, at times 60% to 90% lesser than traditional brokers, by cutting down on expenses on branches, human resources and licenses etc.

    To offer IPO services, you need to have a license and manpower. The commission on IPOs is small and the expenses are high making it infeasible for discount brokers.

    Not only Trade Smart Online, many other discount brokers like Zerodha, Fyers, and Upstox etc., don't offer IPO services.

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  3. What is a lot in an IPO with TSO?

    IPOs are available in lots. A lot is the minimum number of shares you need to bid for during the application process. It is decided by the company as per the guidelines set by SEBI.

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  4. How do I sell the allocated IPO Shares with Trade Smart Online?

    Your shares, allocated through an IPO, will be eligible for trading from the listing day. A significant number of investors sell their shares on listing day if the stock gets listed at a price higher than the application price.

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  5. Who can apply in IPO's with TSO?

    To apply for an IPO, you must:

    • Be from any of the approved categories- QIB, NII or RII
    • Have a Savings or Current Account with a bank with a net banking facility (for application through ASBA)
    • Has a Demat account
    • Has a sufficient balance in the bank account

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  6. What are the charges to be paid to apply IPO online with Trade Smart?

    Banks don't charge any fee for IPO applications. You just need to have the application amount, depending on the number of lots, you wish to buy.

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  7. Can I apply in IPO's using Trade Smart Online Mobile Trading App 'SINE'?

    No, 'SINE' app doesn't offer online IPO.

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  8. Does Trade Smart Online offer IPO services to its NRI customers?

    No, they don't offer IPO services to NRIs.

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Information about Trade Smart Online Initial Public Offer, Trade Smart Online IPO, Trade Smart Online Allotment Status, Trade Smart Online Applciation Status, Trade Smart Online ASBA, Trade Smart Online Apply IPO andTrade Smart Online Demat.

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Information on this page was last updated on Sunday, February 24, 2019


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