InvestorQ : Is any investor eligible to invest in an Indian IPO or are there are restrictions?
Lavanya Subramanian made post

Is any investor eligible to invest in an Indian IPO or are there are restrictions?

Answer
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Archita Jajjoo answered.
1 year ago


Technically speaking, any adult who is competent to enter into a legal contract is eligible to apply in the IPO of a company. Of course, it is essential that you have a PAN card issued by the Income Tax department and you also have a valid demat account. Remember, having a trading account is not necessary in case of IPOs, a demat account alone is sufficient. However, if you want to sell the shares on listing then trading account will be required. That is why brokers will advise you to open a trading account along with demat account when you apply for an IPO for the first time. An important point to be remembered here! When you apply for an IPO it is not an offer but an invitation to offer. Only when the IPO issuer offers you shares it amounts to an offer and when you accept it through an IPO application the shares are allotted to you based on the actual amount of oversubscription entailed.