The share market, including IPOs, has evolved significantly over the years, attracting a growing number of investors. As more people engage in trading and investing, the platforms have also seen many positive changes. Now, Demat accounts are mandatory for traders and investors. You might be wondering whether a Demat account is essential for purchasing IPOs as well. Read on as we focus on how a Demat account can play a role in maximizing the benefits of upcoming IPOs.
What is a Demat account?
Demat stands for a dematerialised account. It is just like a bank account but in an electronic form. This electronic account holds securities just like a bank account holds your funds. Traders and investors who purchase securities like stocks, bonds, and IPOs can hold these purchases in their demat account.
Unlike earlier when the ASBA (Applications Supported by Blocked Amount) method was used to purchase IPOs, now a Demat account has become a prerequisite. To perform the purchase and sale of securities including those in IPOs, having a Demat account is a must. You may purchase and hold IPOs through physical certificates, however, to sell the IPOs, Demat is a must. So, the best idea is to avoid the last-minute hassle and be prepared with a Demat account before you invest in IPOs!
How a Free Demat Account Can Help You Capitalize on Upcoming IPOs?
Initial Public Offerings or IPO is the transition of a company from private to public. This is the first time when a company goes public and offers its shares in the secondary market. Here, investors can invest in the IPOs and become shareholders in that company.
To apply for an IPO, usually demat account is a prerequisite. There are multiple advantages that investors can enjoy with a demat account and IPO investment. These include:
- Ease of application
Unlike the ASBA process which required a long process, applying in IPOs through a Demat account is quick, easier, convenient, and hassle-free
- Safe record keeping
The electronic record-keeping of IPO investments is safer than handling physical certificates. So, you need not worry about mishandling your investments
- Easy access
Since the Demat account holds securities in digital form, you can access it anytime you want. Through your mobile or laptop, it is just a few clicks away to have a quick insight into your investments
- Flexibility of trading
As an investor, the intent of investment is to maximise profit at the right time. Through a demat account, you can hold shares for as long as you want or trade your IPOs anytime you want, within a few clicks. You will no longer have to wait for the long process of selling IPOs.
- Demat offers more than IPOs
A Demat account not only lets you purchase and sell IPOs but a lot more. Investors who are planning to participate in the share market, trading, or mutual fund investment need a Demat account. Through a single account, you can access a range of investment options and create a diverse portfolio!
Choose your preferred depository participant or DP and do the needful for demat account opening. You need to submit essential documents like identity proof, PAN card, address proof, etc. to open a free demat account. So, what are you waiting for? Explore the upcoming IPOs, choose the one you find most promising and begin your journey by opening a demat account today!
Conclusion
A Demat account offers you the much-needed flexibility of maximising returns from an IPO. To sell your IPOs in the share market, you need a demat account. Hence, it is always best to open a free Demat before investing in IPOs. It lets you sell your IPOs in the secondary market anytime you want without having to go through a tedious process.
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