There is no denying that initial public offerings (IPOs) can offer you great opportunities to invest. However, you need to open a demat account to invest in an upcoming IPO. You may wonder, “How do I open a demat account?”

Opening a demat account is a fairly easy process. However, you need to follow the process diligently. If you make a mistake here, your demat account may not open or may take a lot of time to open.

How Do I Open A Demat Account For An Ipo? Here Are The Steps To Follow:

1. Select The Right Broker

You need to select the right broker or depository participant (DP) how can I open demat account online. Typically, banks and brokerage houses act as DPs in the market. You must thoroughly analyse the services offered by a broker and his fees before opening an account. 

Always check whether a broker provides the services that you need. For example, if you want to trade on your smartphone, you should check whether a broker has a user-friendly mobile app or not.

2. Analyse A Broker’s Charges

You have to pay several kinds of charges to a broker, which include annual maintenance charges (AMCs), brokerage fees, account opening fees, etc. 

Such charges tend to vary across brokers. You should ask yourself which services you need from a broker. Then, you should check whether a broker’s charges are in accordance with those services or not.

3. Submit All The Required Documents

After deciding a broker to open a demat account, you need to submit the account opening form with all the required documents, which includes PAN Card, Proof of Identity (PAN Card, Driving License, Voter ID, Aadhar Card, Passport, etc.), Proof of Address (Passport, Driving License, Aadhar Card, Voter ID, Ration Card, etc.), Proof of Income (Form 16, Recently Issued Salary Slips, Past Six Months’ Bank Account Statement with Income Details, etc.), Proof of Bank Account (Cancelled Cheque Leaf or Latest Bank Account Statement), and Recent Passport-Sized Photos.

How do I apply for an upcoming IPO?

A demat account is mandatory for IPO investments. If you do not have a demat account, how will you receive the shares after a company allotts them? Hence, you can apply for upcoming IPO only after opening a demat account. To apply for an IPO, you need to follow these steps:

1. You Need To Login To Your Online Demat Account

Then, you should go to the IPO section and find the IPO you intend to apply for.

2. You Should Enter Your Bid Price And Choose The Number Of Shares You Want To Place Your Bid For

Typically, companies provide a price-range to place your bids. If you place a bid at the higher end of the range, the probability is high that you will get the shares allotted. The higher the price at which you place a bid, the more likely that you will out-bid other applicants.

3. You Need To Provide Your Upi Id And Then Press Submit

Then, you have to approve the transaction by accessing your UPI app.

4. After this, you will receive a notification in your UPI app

Until the shares are allotted, a certain amount of money will be blocked for your IPO application.

Conclusion  

You would have understood by now that opening a demat account is not only mandatory to invest in an upcoming IPO but is also quite easy. 

Once your demat account is opened, you should not limit yourself only to IPOs because you can find great opportunities to invest in all kinds of shares, bonds, debentures, and even futures & options.

However, before investing, you should understand an asset class completely, learn how to research various kinds of securities, and then invest your hard-earned money.