One of the most well-liked methods of getting into the stock market is to invest in an IPO.
However, obtaining an allotment might sometimes be difficult owing to strong demand and limited share availability. Although there is not a certain way, using Smart strategies will greatly increase your odds.
1. Use Several Demat Accounts to Apply
One of the simplest ways to improve your chances is to apply using many demat accounts in your family. You may apply, for instance, using your parents’, siblings’, or spouse’s accounts. There are more applications and a higher likelihood of allocation as a consequence.
2. Select the Option for the Cut-Off Price
When bidding, always choose the “cut-off price.” As a result, your application will continue to be valid at the company’s final issue price. If the offer price is less than the cut-off, skipping this step might lead to cancelation.
3. Steer clear of large applications in the retail sector
Retail investors often believe that submitting the largest application would ensure allocation. In actuality, allocation is carried out by a lottery. Instead of submitting a single, huge application, family members might submit many smaller ones for improved possibilities.
4. Make Proper Use of ASBA and UPI
The most effective way is to use Applications Supported by Blocked Amount (ASBA) via your bank or UPI. To prevent rejection, make sure your account has enough money and that the UPI mandate is accepted as soon as possible.
5. Submit Your Application Early in the Issue Period
Applying on the first or second day lowers the possibility of last-minute technical issues, even if it may not have a direct impact on allocation. Simply because their UPI payment fails on the last day, many investors lose money.
6. Monitor Subscription Information
Watch the number of IPO subscriptions. If the retail section is noticeably congested, you may want to consider the High Net Worth Individual (HNI) or Small and Medium Enterprises (SME) category, if you are eligible.
Conclusion
IPO allocation is mostly up to luck when oversubscription occurs, but you may improve your chances by applying via several accounts, selecting the cut-off price, and making sure your applications are error-free. Having a disciplined strategy and dedication may help you acquire IPO shares.