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IPOs and Demat

About Initial Public Offerings (IPO)

A corporate may raise capital in the primary market by way of an initial public offer, rights issue, or private placement. An Initial Public Offer (IPO) is the selling of securities to the public in the primary market. It is the largest source of funds with long or indefinite maturity for the company.

An Initial Public Offering is an opportunity for investors to take part in the growth of a company. It is always better to be in the first batch of investors. The shares offered by the company get listed on the stock exchanges and can be bought and sold by investors.

Now entire IPO application process is completely online, an investor can use the ASBA route in his online banking facility.

Main Features of ASBA process

ASBA provides an alternative mode of payment in issues whereby the application money remains in the investor’s account till finalization of basis of allotment in the issue.

ASBA process facilitates investors bidding with multiple options, to apply through Self Certified Syndicate Banks (SCSBs), in which the investors have bank accounts. SCSBs are those banks which satisfy the conditions laid by SEBI. SCSBs would accept the applications, verify the application, block the fund to the extent of bid payment amount, upload the details in the web based bidding system of NSE, unblock once basis of allotment is finalized and transfer the amount for allotted shares, to the issuer.

DEMAT Services

Dematerialization is the process by which physical certificates of securities are converted into securities in electronic form by way of credit in investor’s demat account held with a DP(Depository participant ). Dematerialization is change in form of holding; it does not result into change of ownership.

In order to dematerialize certificates, an investor need to open a demat account. Once the demat account has been opened, the investor needs to fill up a ‘Dematerialization Request Form’ in prescribed form and submit it to the DP along with the security certificates. DP will forward the demat request to the concerned issuer company or its Registrar and Transfer Agent for further processing. Once the request is confirmed by the concerned issuer company or its Registrar and Transfer Agent, it results in credit of electronic securities in the demat account of the respective investor.

Our partner Geojit is a depository participant that acts as a bridge between common investors like you and the depositories. Geojit is a SEBI registered intermediary that is a Depository Participant of NSDL and CDSL.

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