Ad www.AngelOne.in
FREE Account Opening + Zero AMC Fees* + MutualFund SIP1
FREE Equity Delivery and MF
Flat ₹20/trade Intra-day/F&O
Ad www.AngelOne.in
IPOs by emerging small and medium size companies with a strong track record, good financials, and robust growth plans attract a lot of investors to make good profits in long run. Prospective investors can apply for SME IPO online/digitally through ASBA net-banking process or via the UPI payment gateway app. The ASBA process allows investors to subscribe for SME IPO using your bank’s net banking portal. Unlike it, retail investors can apply to the SME IPO using UPI app with respective brokers given that your stockbroker accepts SME IPO applications.
Continue reading further to know who can apply in SME IPO, and how to apply in SME IPO with UPI or without UPI or net banking ASBA process.
Retail investors, NRIs, companies, financial institutions, banks, FIIs, mutual fund houses, etc. can apply for a SME IPO. Prospective investors can subscribe to a SME IPO under the following three categories;
Applicants interested to participate in the SME IPO bidding may apply through the ASBA process. ASBA (Applications Supported by Blocked Amount) is a facility that enables individuals to apply for a SME IPO via banks without deducting the amount immediately.
Prominent Indian Banks including HDFC, ICICI, SBI, Axis, etc. offer ASBA facilities to their customers to subscribe to a SME IPO. All you need to apply for SME IPO is a trading account, a demat account, and a bank account.
Steps to apply in SME IPO through ASBA Process;
Applicants can also purchase SME IPO using UPI (Unified Payment Interface) via their demat account with stockbrokers. In India, many brokerage houses like Zerodha, 5paisa, etc. facilitate their customers to apply for SME IPO. Notably, the UPI method is only available to retail investors to purchase IPO for a maximum limit of Rs 2 lakh.
If you have a 2-in-1 account (trading cum demat account) with any stockbroker and your broker’s platform provides access to SME IPOs then you can submit an IPO application using the UPI app.
Steps to apply in SME IPO through UPI;
Are you an SME company looking for an IPO to raise funds and get listed in the stock market? We can help. Contact us today... SME IPO Enquiry Form
Applying in an SME IPO is undoubtedly risky and therefore, recommended to high-risk taking investors. However, SME companies with good growth potential, impressive plans, and strong fundamentals may perform well and provide great returns to investors. These companies may be highly subscribed by investors including retail and institutional investors. Investors must perform due diligence and take extra care before investing in an SME IPO.
SME IPOs backed by strong growth trajectories, good fundamentals, proven business models, and growth plans are definitely a good option for high-risk appetite investors. These SMEs have the potential to deliver high returns to investors.
However, given the bigger lot size and liquidity concerns associated with SME IPOs, some IPOs may not receive good responses and investors may not get good listing gains. Thus, it is recommended to investors perform due care before bidding for an SME IPO.
Yes, Hindu Undivided Family (HUF) is eligible to subscribe to the SME IPO in the name of Karta. Similarly, Limited Liability Partnerships (LLPs) which are registered in India and authorized to invest in the equity shares can invest in SME IPO.
Yes, SME IPOs have a proportion of issue size reserved for the retail category of investors whose maximum bid value is upto Rs 200,000. It is to be noted that, unlike regular IPO that has a minimum trading lot of Rs 12,000-Rs.15,000, the minimum investment in SME IPO is above Rs 100,000.
A list of bidders eligible to participate in an SME IPO includes the following;
Non-Institutional Investors (NIIs) are applicants who invest more than Rs 2 lakh in an IPO, therefore, they can invest in the SME IPO through their bank account supporting ASBA facility.
In this process, you can invest in SME IPO through your bank’s net banking portal by providing your demat account details. The allotted shares will be transferred into your Demat account with stockbroker.
Yes, it doesn’t matter whether you are looking to invest in SME IPO via ASBA net banking or UPI process, you must have a trading and demat account with any stockbroker. The BSE SME and NSE SME listing exchange eligibility norms clearly stated that post-listing, SME shares will be traded in the dematerialized form.
Yes, if you’re a retail investor or individual and your stockbroker allows investment in SME IPO then you can apply through UPI. The maximum application or investment amount in SME IPO via UPI app is Rs 2 lakh.
Any Qualified Institutional Bidder who bid for at least Rs 200 lakhs or 2 crores in SME IPO is known as an Anchor investor. It includes mutual fund houses, insurance companies, foreign portfolio investors (FPIs), etc. As per the SEBI’s regulation, an SME can allocate up to 60% of the QIB portion to Anchor Investors.
No, as an SME IPO issue needs 100% underwriting therefore, in case if the issue is undersubscribed underwriters will be responsible to buy all the remaining shares. When the demand for an initial public offering of an SME company is less than the number of shares issued to the public is known as under-subscription.
Yes, SME companies with strong financial track and proven management attract a large number of investors for the IPO issue. Strong IPO demand results in higher subscriptions and can be expected to provide good listing gains or returns. However, SME IPOs are high-risk bets so before applying, you must analyze the company’s valuation, financials, business model, and niche in the segment.
There are two ways to invest or apply in an SME IPO through the net banking ASBA or UPI via a stockbroker, explained below;
