IPO stands for Initial Public Offering. It is a form of public offering wherein shares of a corporation are sold to retail and institutional investors. In recent times, this type of investment has gained significant popularity. The primary reason for this is its highly rewarding appeal. Once the IPO gets allotted, investors stand an excellent chance of reaping profits. Their Demant Accounts get disbursed with the applied shares almost instantly.
But for this to happen, they must follow specific tips and tricks to ensure their IPO Allotment:
Single Lot application
Many investors believe that applying for multiple IPO lots is advantageous. However, this is far from the truth. If you want to confirm your IPO Allotment, it is advisable for a single lot instead. This stands exceptionally accurate in the case of small-sized IPOs. But if you are dealing with an unsubscribed or large IPO, only then should you apply for multiple lots.
Use different Demat Accounts
We know that you need to open Demat Account to invest in an IPO. But did you know that you could use multiple accounts for an IPO? This is a tried and tested trick many experienced investors use to increase their IPO Allotment chances. But before you do so, remember a few things. For starters, use different PAN numbers for each Account.
Open them under the family members’ names. This is highly effective instead of applying for multiple IPO lots from the same Account.
Choose cut-off price wisely
While applying for an IPO, always choose the cut-off price wisely. Choose one that indicates that you pay the highest price in the price band when the shares are allotted. In the case of an undersubscribed IPO, select the cut-off price strategically to increase your IPO Allotment likelihood. This is because IPO forms with a bid for low bands are often rejected. So do not ignore this tip at any cost.
Sometimes, IPO forms get disapproved due to minor errors. It could be a mistake in your date of birth. Or perhaps, even a mismatch of your name. So, it is best to avoid inaccuracy when providing information. Check for spelling mistakes and typos when filling out the form. Cross-check your information before submitting it.
Track allotment status
Keep an eye on your IPO Allotment status; Although it does not increase your chances of securing a position, it gives you clarity on the probability of the same.
Go for parent company shares
When dealing with a child company, the best thing is to buy the parent company’s shares first. Purchase as little as a single share of the latter right before the allotment process begins. Once it does, apply for the IPO of its subsidiary via the shareholder’s category. This improves your chances of IPO status significantly.
Keywords: IPO Allotment, open Demat Account, IPO Allotment status, IPO status