The right IPO, guaranteed allotment! Avoid these 11 mistakes before investing, and your money won't be lost!

News Topical, Digital Desk : Stock market investors keep an eye on new IPOs. If the IPO is good, it often delivers good returns upon listing, meaning substantial returns in a short period of time. This is why investors are attracted to IPOs. If you're one of these investors, you should avoid certain mistakes.
Common mistakes when applying for an IPO include submitting multiple applications using the same PAN, using a third-party bank account for UPI, entering the wrong UPI ID, and failing to approve the UPI mandate. Other mistakes include missing deadlines, ignoring company financial data, or blindly trusting market rumors. Let's discuss these mistakes in detail.

Technical errors (which lead to rejection of the application)

• Duplicate PAN Number: Submission of multiple applications under the same PAN (even if they are made from different Demat accounts) will result in the rejection of all the applications.
• Wrong UPI ID/PAN: Minor typing mistakes in PAN or UPI ID will result in cancellation of application.
• Ignoring UPI mandate: Failure to accept the payment mandate sent on your banking app (like BHIM or GPay) within the stipulated timeframe will result in the application not being finalised.
• Third-party payments: Using a UPI handle linked to a bank account whose name does not match the name in the Demat account.
• Insufficient Funds: Ensuring that you have sufficient funds in your account to cover the maximum bid price.

Strategic investment mistakes

• Ignoring fundamentals: Applying without reviewing the company's valuation, debt levels, and business model.
• Chasing listing gains: Focusing only on short-term profits rather than long-term company value.
• Grey Market Premium (GMP): Relying solely on GMP as a guarantee of higher returns.
• Not applying at cut-off: Not selecting the cut-off price option (maximum price) may result in your bid not being selected.

Regulatory/structural lapses

• Incomplete industry knowledge: Investing in a company without understanding its competitors or the sector.
• Not reading the prospectus: Ignoring key information related to risks and financial performance mentioned in the DRHP.

If you want to benefit from IPO, then avoid all these mistakes, so that the chances of allotment increase and your money is in a good company.

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