Process of investing in Primary Market

Definition: The process of investing in the primary market involves buying shares of a company directly from the company during a public offer or issue.
Details: Investors fill up an application form with their details, such as name, address, number of shares applied for, bank account details, and demat account information.

Key Steps in the Investment Process

Investors apply for shares through Application Supported by Blocked Amount (ASBA) or Unified Payment Interface (UPI).
The application form is filled, and the money for the shares is blocked in the investor's bank account.
The entire process of listing an IPO takes 6 working days after the issue closure.
Investors receive shares in their demat account, and the funds are debited from their bank account.
If shares are not allocated, the blocked funds are released for further utilization.

Read the prospectus/ red herring prospectus/ offer document carefully before investing in a company's shares.
Be cautious about the price and quantity of shares when applying.
Keep a record of the application price.
Avoid investing based on market sentiments; instead, analyze the company and its financials to make informed decisions.