Is it mandatory to have a PAN Number to apply in an IPO?

Stock Market IPO Basics
, , ,
1

Yes, it is mandatory to have a PAN number to apply for an IPO since July 2006 as per Securities and exchange board of India (SEBI).

2

IPO is an abbreviation for Initial Public Offerings. It is basically a type of public offering in which shares of a company are sold usually when the company needs additional funds which can help them in:

  1. Expanding the business
  2. Increase their working capital,
  3. Repaying the debts, etc.

It is usually after companies convert from private to public and also meet the requirements of Securities and exchange commission-SEC and exchanges. Investment banks are employed by businesses to sell, calculate demand, set the IPO value and date, etc. The people who can invest in IPOs are:

  1. Institutional buyers,
  2. Non-institutional buyers,
  3. retail investors (individual).

Anyone can apply for an IPO offline or online.

For an Offline Application:

  1. You need to fill the application form with the details as- Name, PAN, Demat number, bid price and quantity in the collection centre.
  2. The bank will submit the form and make sure that all the details are correct and verified so that there are no chances of rejections.

For an Online Application:

  1. Go to your trading account and select the IPO,
  2. You need to then maintain the funds in the account after that enter bid price and quantity of the IPO you would like to invest in and then submit.

However, you apply, the amount will then we deducted from your bank account or will just be unable for your use and it is invested in the IPO allotment. Lastly, it gets blocked or unblocked depending upon your outcome of the application.

It is mandatory to have a PAN number to apply for an IPO since July 2006 as per Securities and exchange board of India (SEBI). While applying for an IPO, PAN is an important column to be filled in the form and also the form should be filled with utmost attention as- if there are any mistakes or if the column is blank then the application form will be rejected.

Therefore, you just need to mention your PAN number in the form, attaching the photocopy of the PAN is not necessary.

So, are you thinking to apply for an IPO? Be aware of the requirements beforehand so you don’t miss the IPO you are interested to apply.