Frequently asked questions on IPOs by retail category
???????????????????????????????????????????
Q1: what are different ways of filing application ?
A: You can do it either online through net banking or offline by submitting physical application
Q2: How many applications I can submit through online net banking from one bank account ?
A: You can submit maximum five applications from one saving bank account but it may vary from bank to bank with some banks having their own conditions like HDFC bank allows only the 1st name account holder. For applying more than 5 applications you need another account in the same bank or any other bank.
Q3: Can I apply from current account or over draft (OD) account ?
A: Most of the banks do not allow & do not process such applications.
Q4: Can I apply from sweep in/out saving bank account ?
A: You can apply but there should be clear cash balance equal to application amount available in the account. Most banks do not allow sweep facility for this purpose if the clear balance fall short of the application amount.
Q5: What is important to see from banking point of view at the time of applying ?
A: There should be a clear minimum cash balance equivalent to application amount in the bank. Also after applying through net banking, you should check that the required subscription amount has been “Lien Marked†or “Blocked†in your account which is done instantly.
Q6: Can I apply in the name of family members & friends from my saving bank account ?
A: Yes you can apply.
Q7: Can I apply more than one application in my name from different saving bank accounts in the same bank or different banks ?
A: No. If you do, then all your applications will be rejected.
Q8: What important things are to be seen in an application ?
A: It should be unique in three things as below taken together. These should not get repeated in any way when taken together. However, if a company specifically allows it for say on “Share holder quota†then one can apply with the same set under specific conditions of the company.
1. Name of sole 1st applicant
2. PAN no.
3. DP ID + Client ID
Q9: If I have joint DP account whom I should consider for applicant ?
A: The application should be submitted for Ist name in the joint account with his/her corresponding details like PAN, DP etc.
Q10: Can I apply in the name of Minor or HUF ?
A: Yes you can apply as guardian of minor or Karta of HUF.
Q11: How many lots should I apply to get maximum allocation ?
A: If the issue is good, then it is bound to get over subscribed. In that case no matter how many lots you have applied, you will get maximum one lot that too in a lottery system. So you should not apply for more than one lot in a good issue.
However, in an IPO which may turn out to be good or bad, where subscription is less than or equal to one time in retail category, then you will get as many lots as you have applied subject to Rs. 2 lakh limit.
In this case it is however a high risk proposition. You may lose a large amount of money.
In nutshell, in order to be on safer side, it is advisable to always apply for one lot only in all cases.
Q12: I had applied full lots upto Rs. 2 lakh but was not allotted any shares. There seems to be manipulations. Is there any way say change to a particular bank or DP, applying 1st day 1st hour etc. to get allotment ?
A: No there is no such thing. As per new SEBI rules, whether you apply for one lot or full lots you stand equal chance to get only one lot in lottery system if retail category is subscribed more than one time. However, if it is subscribed less than one time, then you will get all the lots you have subscribed. So far lottery draw is concerned, it is drawn on a highly sophisticated superfast computer system where you cannot have any manipulations.
Q13: When I should expect allotment ?
A: After one week of closing date for subscription
Q14: When I should expect credit of shares in my DP ?
A: After 1 to 2 days of allotment
Q15: When I should expect release of funds in my bank ?
A: After 1 to 2 days of allotment
Q16: Will the funds get released automatically in my account ?
A: In most banks it is automatic however in some banks like HDFC, it has to be done yourself if you have applied online from their net banking.
Q17: When I should expect listing of shares ?
A: After 2 to 3 days of allotment
Q18: Upto what time I can apply for IPO ?
A: In online application it is 2PM or 3 PM. You have to check it for individual bank. Some banks also extend the time when there is huge subscription rush. In physical application through your broker, it can be 5 PM extendable even upto 11 PM. It is advisable not to wait for time extension. Some banks which allow upto 3.00 PM on the closing day are: Axis Bank, PNB, UBI
Q19: Should I submit three bids for one lot each at three different bid prices in one application ?
A: This will not be beneficial. You should submit one bid only at cut-off price.
Q20: If there is a discount, at what price should I subscribe ?
A: In online bidding, the system will take into account discount offer automatically when you make bid at cut-off. In physical application, you will be asked to write bid price, discount & net price. You have then to take net price into account for calculation purpose.
Q21: I have not marked cut-off but has given bid price at upper band. Will it matter in any way ?
A: No. It does not matter
Q22: Why should I bid at cut-off
A: Because your application will always be considered for allotment whatever will be the final allotment price
Q23: If the price band is reduced but I have already applied in original band & amount stands blocked already, then what should I do ?
A: You need not do anything. If you get the allotment, then excess amount will be refunded to you after the allotment.
Q24: How can I Know allotment status ?
A: You can get it from the website of the registrar of the issue.
Q25: How can I know the subscription figure at any time ?
A: Check “NSE bid details†of the issue from https://www.nseindia.com/products/content/equities/ipos/homepage_ipo.htm
Also check “BSE demand schedule†of the issue from http://www.bseindia.com/markets/PublicIssues/IPOIssues_new.aspx?expandable=8&id=1&Type=p
Add the two & you will get the figures at any time during the day. Total figures at the end of a day are however displayed directly on these sites at 5 PM.
Q26: What is meant by Kostak ?
A: Before an issue lists, brokers & individuals purchase the application from investors at a price which is called Kostak. Application is sold at Kostak irrespective of whether or not shares get allotted to that application. The transaction in this case is made at any time.
Q27: What is meant by GMP ?
A: Grey market premium (GMP) is the amount per share which an investor get from the broker or individual who buy them before listing of the shares which might get allotted in his application. The transaction in this case is made only after shares are allotted.
Q:28 My allotment status says “Application not found†What must have gone wrong.
A: In bidding by net banking, the data you have entered do not match with your DP account data with respect to Name, PAN & DP ID + Client ID. Remember banks do not verify these details.
In physical submission, the banks may not have processed your application on reasons given earlier as above. Banks also do not process the application if there is signature mismatch in ASBA signature column as per their records. It may also happen that your broker has not submitted your application to the bank.
Q:29 Should I apply in SME IPO
A: It is advisable not to apply in SME IPOs since most of them are very high risk stocks. Most of these stocks are not tradable and more than 50% are not traded at all after some months of listing even at huge discounts. These stocks are also not traded on platforms of most of the brokers as such check with your broker before investing if he can sell the shares if you get allotment. A minimum of 1 lakh & a maximum of Rs. 1.5 lakh per lot is required for subscribing. Many get stuck up since there are no buyers for most of these stocks after some period of time after listing.
Q:30 What information should I post on this platform
A: Post only that information which is useful to others. Posting information say, I am allotted 2 lots etc., is not anybody’s concern as such should not be posted.
Q:31 Should you post your analysis before price band is announced.
A: Price band is the most important thing in the issue as such it is no use to make any analysis before price band is officially announced. Making an analysis before price band announcement is a waste of time & energy
Q:32 I have submitted the application but I have not received SMS / E-mail from NSE / BSE.
A: You cannot do anything after issue is closed. The only surety that your application is through is to check your bank account. If the amount is “Lien Marked†or “Blocked†in the bank then the application is through otherwise not. Remember, it may take even 3 working days for banks to block the amount if you have submitted physical application.
Q:33 I want to withdraw the application what should I do ?
A: If the issue is not closed then you can cancel it online if you made the application online. In case you have submitted physical application through your broker then you can talk to your broker. After the issue is closed, you cannot do anything in online process but your broker who submits your application to the bank next day can withhold your application for submission to the bank.
Q: 34 I am new to stock market. Can you suggest how to invest in good stocks for long term ?
A: Stock investment is very risky and requires knowledge, constant monitoring and timely action for making meaningful gains. Today’s good stock may turn out to be bad at some future time due to many factors. It is advisable to invest in good mutual funds through SIPs. The mutual fund managers are experts in the field & will take timely action to safeguard your interests. It is however important to select good mutual funds (Maximum 5) out of host of around 500 such funds available in the market.
For any help call me at 9868-458258 by Whats app call till 27.02.17 since I am in USA at present. Keep in mind that if it is 10pm in India then it will be 9.30am in my place in USA. My phone is on DND from 11pm to 8am local time.
Zerodha (Trading & Demat Account)
RHP
Top Contributor (500+ Posts, 100+ Likes)
IPO Mentor (900+ Posts, 1100+ Likes)
IPO Guru (6600+ Posts, 21900+ Likes)
