Every IPO season is a big fish for small investors, provided they take calculative decisions and do not get swayed by emotions. And before getting too excited about IPO investments it’s pertinent for you to figure out: Can I buy IPO without Demat Account?
See, you will find some “clever” investors or traders who will tell you some strange workarounds to buy IPO without Demat Account but let’s get something straight here.
It makes no sense to buy IPOs without a Demat Account. Why?
Because even if one manages to buy an IPO without Demat Account, how can one then trade in those shares that get allotted. As per SEBI guidelines you cannot have your holdings in the physical form anymore. And as stock investing is impossible without Demat account so thus buying IPO shares.
So don’t pay attention to those workaround schemes whether you find them on the web or as advised by a fellow trader instead tell them that SEBI has directed that any share trading is only permitted through a valid Demat account.
Now that it is amply clear that you can’t or rather shouldn’t buy IPO without a Demat account, hence we should now shift towards finding out how to apply for an IPO using a Demat Account.
But before that, if you are looking to open a Demat account, then get it online now!
Before going into the specifics, first, simply open Demat Account online with a renowned stockbroker. Once you get it over with, you can now wait for an IPO to open and then apply for it using the following explained procedure:
STEP 1: Log on to the trading platform as provided by your stockbroker.
STEP 2: Now skip to the IPO selection portal.
STEP 3: Among the list, select the IPO you want to apply for.
STEP 4: After selecting the desired IPO, you will get redirected to the application window, now enter the number of shares, price, and the payment gateway of your choice.
STEP 5: After this just click on submit and with that you will receive a prompt asking whether you wish to block the transaction amount for this application. Verify this and you are done with the IPO application.
The above-explained process is also known as Application Supported Blocked Amount (ASBA). In this process, the desired amount gets blocked till the IPO allotment date and only debited if IPO gets allotted otherwise is simply released back into the account.
The thing is that not all IPOs create a buzz and those that do aren’t necessarily profitable. In fact, several times in the past, unpopular IPOs have recorded huge returns although several investors miss out on those opportunities.
Hence, it’s better to not take unnecessary risks, and just open a Demat Account with a broker of your choice and then just apply for an IPO that you find in the list under the IPO segments of your Demat account platform.
No doubt, IPO brings in an opportunity for young investors to invest securely, and if you want to begin your investment in the share market, then get started now by opening a Demat account online for Free!