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What is an Initial Public Offering?

An Initial Public Offering (IPO) is a process through which a private company goes public by offering its shares to the general public. Over the past two decades, investment in equity thru IPO or primary market route has become very popular amongst the investors. As the company grow, it usually finds the listing of equity mandatory. Large institutional investors feel comfortable if exit is provided for thru exchange platform. A lot of newly listed companies have generated large listing gains at the same time there are a number of companies who have fallen below the issue price due to mispricing .Investors by and large are always looking out for a reasonably priced IPOs

IPO Subscription

Can only a few companies offer IPO subscription?

IPO subscription can be offered by any company regardless of the size of the company, years of operation, type of business, and industry type. In the life of a growing corporate, need to List equity (and hence to come up with IPO) is always felt at some time or the other. Investor also are tempted for the Listing gains. So IPO retains the label of most sought after equity product.

What are the benefits of IPO investment in India?

Following are the key advantages of making an IPO investment in India:

  • Higher liquidity since shares subscribed through IPO can be traded easily in the stock market
  • Investors can access high-quality unlisted shares through an Initial Public Offering
  • IPO subscription provides investors with a great way to diversify their portfolio
  • IPO investment in India is a great medium to own a stake in the top-performing Indian PSUs

How to invest in ipo in india?

Here are the key things that you need to remember for making an IPO investment in India:

  • Have clear financial objectives behind investing in IPO
  • Understand your risk appetite and only then invest in IPO based on your risk propensity
  • Once you’re ready with the above, simply open your Demat account and online trading account for starting your IPO investment
  • Stay away from hype and copying other’s IPO investment strategy
  • Read, understand, and analyze market trends
  • Consider taking help from a professional financial broker since they’ll guide you precisely based on your risk profile and financial objectives while helping you with timely IPO recommendations and advisory services

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Fees and other financial terms and conditions for investing in stock baskets:

  • The client agrees to pay the fees calculated in the manner and on the rates as provided in the Schedule I.
  • The Basket profits or returns would include any dividends, benefits received out of corporate actions.
  • All the costs, fees, charges as per schedule I and expenses of whatsoever nature incurred by us in connection with the acquisition, holding, sale and transfer, in respect of the dematerialized state charges of the Depository Participant, in respect of Securities shall be paid by the Client.
  • A new separate DP account is required for all investors for the basket investments.
  • For new and existing clients, the Demat account will be used only for equity basket and Investor is free to open separate Demat account for self managed investment.
  • During the course of investment, we will invest as close as possible to the basket amount. Some small surplus to be left due to rounding off that amount will be managed /invest/return to the investor as suitable.
  • The stocks in the basket will be as per the discretion of the ACMIIL. These stocks would be reviewed from time to time and the rebalancing, (if any), of the stocks in the basket would be at the discretion of ACMIIL.
  • You are free to exit basket wise or exit from all basket at any point of time. You are not allowed to selectively exit from any stock or add any stock to the basket.
  • In case of a bank mandate, we will need 20% more mandate of the basket amount as the stock price will fluctuate time to time. The amount taken from bank would be actual value of Basket.
  • The Client agrees that in the event of a dispute, the Claims, if any, by the Client cannot exceed the fees paid by the Client for the year for advisory services in Rupee terms.
  • The client agrees that in case of any dispute, the claim and/or disputes will be referred to arbitration as per the Rules, Bye-laws and Regulations of the Stock Exchange where the trade is executed and the circulars/notices issued there under as may be in force from time to time.
  • As a SEBI registered stock broker, we are permitted to act as an adviser. This product is part of our advisory activity.
  • As a SEBI registered stock broker, we are permitted to act as an adviser. This product is part of our advisory activity.

Schedule I

Fees Structure
Nature of FeesFees
Basket FeesINR 300 per basket + GST (Charged upfront)
Advisory Fees (Second year onwards)2% p.a+ GST (Charged upfront on Basket Value)
Approx Transaction Charges0.13%
Note: In Basket fees and Management Fees, GST will be recovered at the applicable rate.
Transaction charges includes Brokerage, STT, Stock Exchange charges, Stamp duty, SEBI Charges & GST

Fees Structure Example:

Suppose Client A has bought 1 basket for 36 months so he will pay INR 300 per basket as Basket fees for 36 months and from 13th month onwards he will pay Advisory fees for 1st basket as one year ends for the basket. So, after completion of one year the client A has to pay the Basket fees (13th month fresh basket) as well advisory fees (1st basket upfront Advisory fees for second year).

Transaction Charges Includes
HeadsRate
STT (Central Govt)0.1% on Transaction Value
Transaction Charges (Stock Exchange)0.0034% on Transaction Value
Stamp Duty & SEBI Charges0.011% on Transaction Value
GST18% on Transaction Charges.
  • I have understood that Investment in securities market is subject to market risk, read all the related documents carefully before investing. Past performance is not indicative of future performance and future results. The recommendations made by ACMIIL could be those that are based on its own research or on the advice of a SEBI registered Investment Adviser.
  • I have understood the equity basket fees terms and other financial conditions and the clarifications required by me. I understand that the investment in Equity basket is subject to risk associated with equity investments. I have understood the investment process and other aspects of the product.
  • I hereby agree to participate.

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