To be eligible for an Initial Public Offering (IPO) in India, investors must meet the following criteria:
- Be at least 18 years old
- Have a bank account with sufficient funds
- Have a Demat account with a Depository Participant (DP) registered with Indian stock depositories
- Be able to enter into a legal contract according to the laws of the country
The four types of investors who can bid for shares during an IPO are:
- Qualified Institutional Investors (QIIs)
- Anchor Investors
- Retail investors
- High-net-worth individuals (HNIs) / Non-institutional investors (NII)
Retail investors can invest up to INR 2 lakh in an IPO. Investors with more than INR 2 lakh fall into the HNI and institutional investor categories.
An IPO is the process by which companies sell their first shares to the public. To go public, a company must file an IPO prospectus with the Securities and Exchange Board of India (SEBI).