Introducing IPO Portal
Introducing IPO Portal

Initial Public Offering or IPO is a process in which a privately operated company offers shares to the public for the first time in order to raise equity capital and turn into a publicly listed entity. This could be done either for expansion of business, to meet working capital needs or to provide an exit to earlier shareholders. For a public offering of shares, the stock market regulator, Securities and Exchange Board of India (SEBI) has listed down certain guidelines and requirements to be fulfilled before launching the IPO. This includes the sharing of financial records (i.e., through Red Herring Prospectus) of the company to the public.

In earlier times, If retail investors wished to apply for an IPO, they had to submit the ASBA (Applications Supported by Blocked Amount) application through the SCSBs (Self Certified Syndicate Banks) via net banking which was a time taking process. In order to reduce the time taken and hassles for the public, SEBI and NPCI have rolled out Unified Payments Interface (UPI) for IPOs. Now, this facility is available at FYERS and our clients can apply for all the upcoming IPOs directly through the FYERS IPO Portal.

How to apply for IPOs through FYERS using UPI

  1. Create a UPI ID: First, Client has to create a UPI ID with any of the IPO enabled BHIM UPI apps. Currently, there are 47 banks on UPI with IPO feature. You can check out the list here. If you already have a UPI ID, you can skip this step.
  2. Go to FYERS IPO Portal: On FYERS IPO Portal and click on ‘Apply’ beside the respective IPO of interest. This will redirect youto the IPO application page.
  3. Enter UPI ID on IPO Application: Enter the UPI ID created.
  4. Place the Bid(s) details: Select the investor type. While placing bids, quantity must be entered in multiples of the lot size. If you wish to apply at the cut-off price (Highest price), click on the checkbox next to ‘Cutoff-price’.
  5. Submit: Once completed with all the steps mentioned above, click on the checkbox to confirm that you have read the Red Herring Prospectus and other documents and click on submit.
  6. Check the notification and approve: You will receive a notification of the IPO mandate in your UPI app, You need to approve the transaction.
  7. Check application details: Check the application details and proceed to pay.
  8. Enter UPI PIN: Enter your UPI pin to approve the mandate block.
  9. Confirmation of transaction: At the end of the day after submitting the IPO bid, you will receive an SMS from the exchange confirming your application. In the meantime, you can check the status of your order in the FYERS portal by selecting the IPO you have applied for and the last updated bids in your application will be shown.

Note: The Upper limit for making an application in an IPO using UPI is ₹2 lakh. In order to apply for more than ₹2 lakhs, you will have to apply through Netbanking ASBA.

Information with regards to IPOs

Important Dates to an IPO:

  • IPO Open Date: indicates that investors can start applying for a given IPO.
  • IPO Close Date: indicates the last date to apply for the IPO.
  • Basis of Allotment Date: the date on which a document called ‘Basis of Allotment’ is published by the registrar of the IPO, containing the details such as the number of valid applications received, the total number of shares applied, the ratio of the allotment, and the number of shares allocated to the applicants. On this day, the investors the status of allotment will be communicated i.e., whether they’ve been allotted the shares or not.
  • Initiation of Refunds: after the allotment is finalized, all the applicants of the IPO to whom the shares were not allotted will receive refunds on this date.
  • The credit of Shares to Demat Account: the date on which the shares allotted in the IPO will be credited to the investors’ Demat Accounts.
  • IPO Listing Date: the date on which the IPO is listed in the respective stock exchanges (i.e., NSE & BSE) and will be available for the public to trade.

Price Band: A price band is the range between the lower limit and upper limit, within which an investor can place the bid.

Minimum Quantity: the minimum number of shares that an investor must bid for at the time of an IPO application.

Red Herring Prospectus: The Preliminary document filed by any private company with the Securities and Exchange Board of India (SEBI), with an objective to raise capital through a public issue. The Red Herring Prospectus includes details about the promoters, the purpose for raising money, financials of the company, usage of the capital raised, risks involved in investing in the company, etc. The prospectus will not contain the details of the price or size of the IPO.

Status of IPO: An Individual can only apply for an IPO during the Open and Close dates. If it is inactive, one cannot apply.

How UPI ASBA is better than the Netbanking ASBA mechanism

  • Through UPI ASBA, Clients can apply for any IPO through FYERS whereas, in Netbanking ASBA, clients have to apply through SCSBs only.
  • UPI ASBA was introduced to reduce the processing timelines in public issues from the existing T+6 to T+3 whereas, in the Netbanking ASBA mechanism, it’s still T+6 as there is a physical movement of ASBA applications.
  • UPI reduces the need for manual intervention, whereas in the case of Net banking ASBA, intermediaries will always be present.

Who can apply for IPOs using UPI?

Only Individuals (also called Retail Individual Investors) are authorized to apply for an IPO through the UPI ASBA mechanism. Non-Individuals (i.e., Non-institutional Investors) have to do through the net banking ASBA mechanism.

Can the clients of FYERS apply for the Follow-on Public Offer (FPO)?

Yes, Indeed! All our clients can also apply for FPOs through the portal. Applying for an FPO is the same as applying for an IPO.

We hope that this facility will help you capitalize on the opportunities instantaneously, and hassle-free. We’re coming up with more exciting things in the future. We're working on providing more features soon, stay tuned. Also, refer your friends by registering their contact details on our Refer and Earn portal.