Yes, you can apply for an IPO application under a minor or HUF's name, provided they have different PAN card numbers. Minors can open a Demat account with their parent’s PAN Card and bank account.
As per the SEBI guidelines, a person willing to apply for an IPO can only apply once for a particular IPO. Any more than one application per IPO will lead to the rejection of all the extra applications applied. Its determined by the PAN number as to how many applications the traders or investor might have applied. However, when it comes to a minor or HUF willing to apply for an IPO, things change slightly.
An IPO application under the name of a minor or HUF can be applied provided they have their PAN card details, minor demat account, and savings bank account details. For bank account details, traders or investors can give their account details as banks allow up to 5 IPO applications to use the same bank account details. But do keep in mind, you cannot use your PAN card details. Only the minor’s or HUF’s PAN card details would be viable in this situation.
When a company sells its shares to the common public for the first time, the process is known as an ‘Initial Public Offering’ or IPO. After an IPO, a private company is converted to a public limited company as the shares are sold to retail and institutional investors.
When applying for an IPO, you are among the first investors to purchase the shares of a private company from the primary market. And once the listing takes place, you can buy/sell the shares on the stock exchanges with the help of a stock broker and Demat account. IPOs have been in the limelight for the past couple of years, as a plethora of companies went public from 2020 to 2021. Additionally, there are many IPOs lined up in 2022. Hence let’s look at some of the requirements for applying for an IPO.
When you are applying for an IPO, you are bidding for the shares of a company. Therefore, the primary requirement for applying for an IPO is a Demat and trading account.
A Demat account is an account that maintains your shares safely and allows you to buy and sell them freely. Without an active Demat account, you cannot purchase or sell shares of any company.
Next, you need to have a bank account to make the payment for the shares. A bank account is mandatory because the whole IPO process is online. Therefore, you will need to make the payment for the IPO application through UPI or ASBA (Application Supported by Blocked Amount). While applying for an IPO, the funds are blocked in your bank account for a certain time frame. And only after successful allotment the amount is deducted from your account.
You will also require a valid PAN number through which your application will be mapped to the registrar of the IPO. PAN number is compulsory when applying for an IPO. Also, only one IPO application can be placed from a pan number. Or all the applications will get rejected if you apply for multiple lots from numerous Demat accounts.
A common question among investors is, “Can I apply for an IPO from a minor’s account.”
Minors can open a Demat account with their parent’s PAN Card and bank account. Thereby, if a minor has a Demat account, you can apply for an IPO through that account. However, you should remember, you can use only 1 PAN number for one IPO application. Hence, if you have placed an application from a minor’s demat account, you cannot place another application using the same PAN Card.
Another common question when investing in an IPO is, “Can I apply for an IPO from a HUF account”
HUF or ‘Hindu Undivided Family’ account is treated as a separate account. Therefore, if you have a Demat account in the name of a HUF, you are eligible to apply for an IPO through it. HUF accounts are a great way to apply for IPOs as you can increase your chances of receiving an allotment when applying through multiple accounts.
Public Provident Fund Scheme is a saving scheme that comes with tax benefits. Ministry of Finance introduced this scheme in the year 1968. The main objective of PPF is to encourage general people to mobilize their small savings. The interest offered on these schemes are not taxable. Precisely, PPF is an investment with non-taxable returns.
Yes, you can open a demat account on your minor son/daughter's name with Upstox. However, after a specific age limit (generally 18), you can link a trading account to the Demat account. If not a trading account, users can open a Demat account and then connect the trading account.
Yes, you can apply for an IPO application for your family and friends through your savings bank account details. However, keep in mind that only five applications can be filled with the same bank account details.
Have you ever wondered id a minor can apply for an IPO? Yes, a minor can apply for an IPO given that he/she has a PAN card and a Demat account.
KRA is an abbreviated short form of KYC Registration Agency whose primary job is to collect and maintain KYC records of individuals on behalf of SEBI registered financial market participants mainly Mutual Funds companies, NBFC, Brokers etc.
IPO's (Initial Public Offering) is very popular right now. Therefore getting an allotment is not easy. There are two different ways in which you can find out your allotment status. These are through the BSE India website and the company Registrar's website. Know the details and another bonus way of finding out allotment status here.
Yes, a demat and trading account can be opened by the HUF Karta to trade in various stock market segments. The entire procedure is the same as the usual standard of opening a trading account. However, the PAN Card details, Bank account details would be that of the HUF account.
No, a person cannot apply for a single IPO more than ones. There are strict rules and regulations followed in this matter. However, his/her family members can apply for the IPO under their name provided they have a demat account and PAN number.
There are about 5 IPO applications that can submit through online net banking from one bank account. However, the number can change immensely from one bank to another.
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).