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How to increase the chances of IPO allotment? February 24 2022Latest IPO updates

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How to increase the chances of IPO allotment?

In search of an IPO allotment in 2022! Without a doubt, 2022 will be a blockbuster year for the Indian stock market, with plenty of initial public offerings (IPOs) waiting to be listed. 2021 was a wonderful year for investors in India, with almost 60 initial public offerings. The future looks even brighter, as the market for initial public offerings (IPOs) and investor’s enthusiasm is quite promising.

Despite the large number of upcoming IPOs, many people are still concerned about IPO allotment. Almost every initial public offering (IPO) in 2021 received a higher number of subscriptions than expected. However, only a small number of people were able to get on the IPO's allotment list. You already know that there are a few things you can do to improve your chances of receiving an IPO allotment. These factors are outlined below to assist you with IPO allotment. Let's go explore!

Let's look at how you can improve your chances of getting an allotment of IPO?

Avoid big applications

Big applications should be avoided. SEBI's current allocation procedure considers all retail applications equally. That means that even if you submit a large application worth a lakh rupee, you may not get any benefit if the offering is oversubscribed. Large applications are excellent for large IPOs where there is a reasonable chance that the retail segment will remain unsubscribed.

Apply for the IPO as soon as you can

For the bidding process, all IPOs are available for three days. If you plan to bid, do so within the first two days of its availability, if feasible one day. Bidding as soon as possible increases your chances of receiving an allocation. It's fine to play it cautious, but if you've done your homework and have a good understanding of the company and the IPO, it's always better to bid early to escape the rush. Many investors play it safe and bid on the IPO's final day. This may cause you to miss your allotment, resulting in the loss of an investment opportunity.

Bid at the cut-off price

Assume an initial public offering (IPO) has been issued with a price range of $150 to $155 per share. If you bid at the cut-off price, it means you're willing to buy at any price between Rs 150 and Rs 155 for the share. As a result, when filling out the IPO application form, it's a good idea to use a cut-off price. . To be clear, a "cut-off price" is an investor's readiness to pay whatever price the firm decides at the end of the book-building process. The investor must then bid at the highest price range after applying Cutoff. If the price is lower than anticipated, the difference is refunded.

Don't make a hasty decision at the last minute

Before putting your builds on the last day, several investors look at subscription levels in the High Net worth Individual [HNI] and Qualified Institutional Buyer [QIB] categories. Some investors are waiting to see how the HNI and QIB categories buy IPOs. However, if there is a technical problem, you may have difficulty submitting your application. Furthermore, because most banks do not accept applications after 4 p.m., submitting an IPO application may be too late.

Purchase stock of the parent company

Buying at least one share of the parent or holding company in your demat account is a smart strategy to make your IPO a good deal. This will verify that you are eligible to apply for the position as a shareholder.

It's important to remember to approve the mandate request

This is a common mistake made by new investors, especially those eager to get their feet wet in the IPO market. They apply for the IPO offered by the brokers and consider the job done. You will, however, receive a mandate request when applying for the IPO. You must approve this request through the banking app or website. The funds will not be locked in your account if the mandate is not approved, and you will not be considered for the IPO allotment.

Make sure you double-check everything

When filling out the IPO form, like with other formal applications and submissions, you must undertake due diligence. Remember to double-check your name, demat account number, application category, and other information on the form. IPO applications have been rejected in a number of instances due to basic errors and incorrect information.

Conclusion

When an IPO is oversubscribed, allotments are allocated by a lottery system. As a result, keeping an eye out for under subscribed IPOs is a good idea. You might also look into undervalued IPO allotments with low subscription rates. While no one can predict the IPO allotment procedure, following the guidelines above can help you improve your chances of receiving an IPO allotment.

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Prevent Unauthorized Transactions in your demat and trading account --> Update your Mobile Number/Email id with your Depository Participant and Stock Broker. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat/trading account directly from CDSL and Stock Exchanges on the same day.........issued in the interest of investors...

1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.

2. Update your Mobile Number & Email Id with your Stock Broker/ Depository Participant and receive OTP directly from Depository on your Email Id and/ or Mobile Number to create pledge.

3. Pay 20% upfront margin of the transaction value to trade in cash market segment.

4. Investors may please refer to the Exchange's Frequently Asked Questions (FAQs) issued by NSE vide. Circular No. NSE/INSP/45191 dated: July 31, 2020 and NSE/INSP/45534 and BSE vide Notice No. 20200731-7, dated: July 31, 2020 and 20200831- 45 dated: August 31, 2020 and dated: August 31, 2020 and other guidelines issued from time to time in this regard.

5. Check your Securities/ MF/ Bonds in the Consolidated Account Statement issued by NSDL/ CDSL every month.

"As per the directives of CDSL and esteemed Exchanges, it has been made mandatory for every client to furnish their latest KYC details viz. Valid Mobile No., Email- Id & Income range on or before 31.05.2021 else your Account will be marked as Non Compliant and will be Freezed till the compliance of such requirement."
"No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."
"KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary."
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