Open an account
×
Open an account

What is an IPO : A Complete Guide for Beginners

17 Aug, 2021

What is an IPO : A Complete Guide for Beginners

We all dream about our ideal financial life and set some financial goals to achieve, and to fulfil these we give our best to make all those attempts to move closer towards our dreams. But we often lack in making financial planning and finding out the most sorted out option to create more wealth.

Investments are considered to be the best option for making the most use of your hard-earned money and open the door to a happy financial future!

Some investment options may give you better profits while some might not, some may help you meet your long-term financial goals while others may not live up to your expectations! This is one of the points where you can get stuck while finding the most suitable, reliable and trustable option to invest your money. Tips to invest in IPOs.

What if we introduce you to a solution to all of these queries combined in a single investment option? Find out that 'one ultimate solution for all your investment-related decisions' in this blog.

And that solution is: IPO

What is an IPO?

IPO (Initial Public Offering) is the process by which a private company becomes a publicly listed company by offering the shares of the company to the general public for the first time. IPOs create a win-win situation for both; the company going public as well as for the investors.

There are 2 types of IPOs offered by companies:

1. Fixed Price Offering
As the name suggests, under this type of IPO, the company decides the price of the shares and if you are willing to participate in that IPO, you must pay the full share price when applying.

2. Book Building Offering
In this type of IPO, you will have to go through the auction or the bidding process and then the final price is being decided by that company. The company issuing an IPO also declares a 20% price band on the stock price.

Why to invest in IPOs: The Benefits

IPOs are a great investment tool that will provide you with greater profits in the long run. If you are investing in a small company that has greater potential to be successful in the future, you only invest a small amount, as they offer those shares at a discount. In this way, you invest a small amount but earn more returns.

The sole reason why a lot of investors wait for companies to issue an IPO is that it provides them with numerous benefits in one investment option to achieve their financial goals.

Try Sharepa - The Best Trading Platform for IPO

How to invest in IPOs?

  • The first step is to decide which of the company's IPO you want to apply for. To make things simpler and easier, you can go through the prospectus of the companies that are planning to issue an IPO.
  • Open a Demat and trading account to move further with the process.
  • Complete the application process as required and make a bid while applying for an IPO.
  • The shares are then allotted, and credited to your Demat account.

Once you complete the above steps, you will have to wait for the stocks to be listed on the stock exchange.

Also Read, 4 reasons why IPOs are a financial blessing to you

Now with IPOs available, consider all your financial worries gone, as it will take off all your burden and will help you in living the life that you have been dreaming of for years! Once you start investing in IPOs, there's no going back!

Begin your investment with Sharepa - Best Discount Broker in India

For any queries, drop us an email at helpdesk@sharepa.net.in or call us on 022-61778660 / 68. To open an account, please click on the button below.

Making online investment easier, faster, smarter

account opening
account opening*
Flat Rs. 20 per order
per order

To view the documents required, click here.

*Account would be opened after all the procedures related to IPV and client due diligence is completed.