Can a Minor Apply for an IPO? Before we answer this question, let us understand the definition of a minor!
A minor is someone who is below the age of 18 years. This magic number ’18’ varies from one country to another, however, most of the countries including India treats ’18’ as the separation line.
This age separates someone in adulthood from childhood. Most of the financial and legal entities differentiate a minor from an adult based on age. The respective laws and governance are different for both kinds of users.
As we know, that a Demat Account is mandatory to store shares you buy from the stock market. In case of IPO, if you get shares allocated, all those are credited to your Demat account itself.
Thus, the minor needs to make sure to open a Demat account in advance before applying an IPO. That is why it is advisable to know the process of How to open Minor Demat Account?
As far as using a bank account is concerned, a minor can use any of his/her parents’ bank account to link with the trading account (in the name of the guardian). It also needs to be known that not many stockbrokers allow minors to open a trading account, just the Demat account.
Once the minor ages beyond 18 years, then the minor can decide one out of the two:
Convert the minor Demat account into a major Demat account while deleting the details of the guardian.