Initial public offer (IPO) is made through Fixed Price process or Book building process or combination of both.
- In fixed price issue you know the price at which stocks would be allotted to you and payment is made at the time of applying.
- In book building process you know a price range at which stocks would be given to you (eg. 300 -350) and not the exact price.
To apply for an IPO,there are two options available now a days
Offline method to apply for an IPO
You can get the application form for the IPO from different investment consulatant,brokers,banks or some other sources.You need to fill the application from and submit the money at the designated bank.In the offline option if the stocks are not allotted to you then a check would be sent to your address as the refund money.
Demat account is required for both the offline and online options so that the Stocks can be deposited in your account after allottment.
Online method to apply for an IPO
This is the much convenient option to apply for an IPO.For this you just need to have a demat account with online trading access.You just need to choose the IPO to invest in and with few clicks you can apply for the IPO of your choice.
If the stocks are not allotted to you during the allotment of shares then the money will be credited back to your account electronically. This is much preferred option for individual retail investors as it avoids the lengthy paperwork involved in the process.