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How do I invest in IPO with a discount broker?

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While it makes it easy to apply for IPO shares through broker, you actually doesn't need a broker to apply in an IPO. Traditionally people use to apply IPO using paper form directly through banks and similar process is available now with some automation.

Under ASBA facility for applying IPOs, investors can apply in any public/rights issues by using their bank account. Here are the steps:

  • Step 1: Download Application Form (PDF)

    Download particular IPO's 'Blank ASBA Form' or fill online ASBA Form on IPO Detail page on BSE/NSE website. Note that each application downloaded has a unique application number and it cannot be reused.

  • Step 2: Fill Application Form and Print-it

    Fill the downloaded editable PDF with information like name of the applicant, PAN number, demat account number, bid quantity, bid price and other relevant details.

  • Step 3: Submit Form to Nearest Branch

    Submit the application at the designated branches of the banks where you can submit this form in your town. The list of branches is available on same IPO detail webpage from where you downloaded the application form.

The bank will now upload the details of the application in the bidding platform. Investors shall ensure that the details that are filled in the ASBA form are correct otherwise the form is liable to be rejected.

Note:

Do I have any other option?

If you are a frequent IPO investor, it's a good idea to keep an account with one of the full-service broker, preferably a 3-in-1 account with your bank. It cost around Rs 1000 AMC but makes its easy.

Most stock market investors who have account with the discount broker in India are still hold an account with the full-service brokers for add-on services like this.

The shares allocated through IPO can be transferred to the demat account linked to your discount broker trading account though an offline demat transaction (which is available online on most full-service brokers website).

Will this change in future?

Yes, we expect that few top discount brokers will eventually start offering this service. Brokers like Zerodha already started offering Mutual Funds. With IPO through UPI, all brokers including discount stock brokers will offer online IPO's.


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