What is IP?

IPO stands for Initial Public Offering. It is the process by which a privately held company becomes a publicly traded company by offering its shares to the public for the first time. A private company with a handful of shareholders goes into the public sector by trading its shares and shares ownership. Through IPO, the company's name will be listed on the stock exchange.

E.I.P.O

It's similar to the IPO. As the name suggests, medium-sized companies raise capital by selling shares to the public.

Small and medium-sized companies receive funds from private investors through IPOs when they do not receive the required funding privately. At the end of the year, SME stocks can be traded on the stock exchange. Public investors who want to become shareholders of small and medium-sized companies can buy these shares.

Conditions for companies to issue e-IPO

Companies must be incorporated under the Companies Act, 1956.

Should have a face value of up to ₹25 crore

Must have a tangible asset of ₹1.5 crore

SMEs formed by converting partnership / proprietorship / LLP firms should have a track record of at least three years.

The SME must have a website.

The promoters of the company should not change for at least one year after the IPO is filed.

SMEs must agree to trade in demat securities.

An agreement has to be entered into with the SME depositors.

Can I apply for it?

1) Open a demat account: The first step is to open a demat account with the broker of your choice, which is meant for storing securities in digital form. There are many apps available for this.

2) Watch IPO Announcements: Keep a close watch on the upcoming IPOs through various channels such as newspapers, the company's official website, and announcements on BSE SME or NSE SME exchanges. The IPO announcement will mention the opening and closing date, price band and lot size. Investors can get notifications for NSE SME and BSE SME IPOs on their demat account app.

3) Apply for IPO: Once the IPO is available, there are several ways to apply. One of the most common ways is to apply online through a web trading platform or a stock trading app. Give investors accurate details such as the number of lots they want to apply for and the price they are willing to pay. To apply for an IPO, investors need to have a UPI ID linked to their bank account. IPO applications are issued through the ASBA process, which means the application amount is blocked in your bank account until the allotment process is completed.

4) Submission and Payment of Bid for IPO: Bidders can submit the application form to their broker before the last date of IPO. This can be done online through the broker's platform. Bidders can submit bids at the cut-off price on the last date. Bidders can also bid within the price range. Bidders must ensure that sufficient funds are available in the bank account linked to the Demat account.

5) Check allotment status and refund amount: On completion of the IPO, bidders can check the allotment status on the website of the exchange or at the registrar. If the shares are allotted, they will be credited to their demat account and if not allotted, the bid amount will be refunded to their bank account.