IPO means Initial Public Offering. It is a process by which a privately held company becomes a publicly-traded company by offering its shares to the public for the first time. A private company that has a handful of shareholders shares the ownership by going public by trading its shares. Through the IPO, the company gets its name listed on the stock exchange.

Every business needs money, whether it's expanding, improving, improving infrastructure, or paying off loans. Companies use the IPO route to generate fresh equity capital for the company to further its business.

For a company to go public means that the brand has achieved enough success to flash its name on the stock exchange. It is a matter of trust and pride for any company.

In demanding markets, public companies can issue more and more shares. This paves the way for acquisitions and mergers by allowing shares to be issued as part of a transaction.

Trading stocks on the open market means increased liquidity. This opens the door to employee ownership programs such as stock options and other compensation plans to attract top talent.

Today, applying for an initial public offering has become easier thanks to the online registration process. However, if you are a new investor, there are a few things you need to learn before you sign up.

How to apply for IPO thru Navia – Watch Video

You cannot invest in stocks without a DEMAT account. Choose a proven and reputable broker like Navia to Open a Free DEMAT & Trading Account.

You can use the DEMAT account not only for IPOs, but to receive all sorts of investment instruments like gold bonds, corporate bonds, shares, and more.

There are no charges to apply for IPO

IPO orders can be placed anytime between 10:00 AM on the issue opening day and 4:30 PM on the issue closing day.

New applications that are placed during the market hours are submitted to the exchange on the same day, whereas the applications that are placed between 4:30 PM to 10 AM the next day are submitted when the market opens. The submitted IPO applications can be modified or cancelled only between 10:00 AM and 4:30 PM on trading days.

During the IPO period, mandates for applications submitted between 4:30 PM and 10 AM will be received on the UPI app once the IPO market is open, between 10 AM and 4:30 PM on trading days.

An adult who is capable of entering into a legal contract is considered eligible for investing in an IPO. The individual can be a qualified institutional investor, anchor investor, retail investor or a high net-worth individual. Apart from this, some basic criteria for eligibility are:

• The individual should have a pan card issued by the income tax department.
• A valid Demat account
• It is not mandatory but advisable to have a trading account for investing in an IPO. A trading account will help an investor sell the stocks present on the IPO listings, in near future.

An IPO is listed at 9:00 a.m. on the day of listing. A one-hour pre-open trading session will be held from 9:00 a.m. to 10:00 a.m. on the day of listing. Normal trading for the IPO shares will begin at 10:00 a.m. on the day of listing. Price fixing will take place during the pre-open session.