The last calendar year saw over 35 Initial Public Offerings (IPOs) and 2017 is also expected to end with a number of IPOs. The stock markets are swinging into a bull phase with investor sentiment being positive. Several investors are looking for good IPOs to earn profits in the stock markets.

Understanding an IPO
An IPO is first-time a private company offers its shares to the public investors. It is a means of collecting funds from the public for various purposes, such as business expansion or diversification. In exchange for the money collected from public investors, the company offers proportionate shares.

After receiving approval from the authorities, the company takes help of an underwriting firm. The underwriter helps the company to decide on the kind of security to be issued, its price band, number of shares to be offered, and the right time to maximize the investments.

Procedure to apply for an IPO
These days, there is an increase in the number of applicants for IPOs. This is because several good offerings have delivered excellent returns on listing. Furthermore, some companies continue to trade at higher premiums even after being listed for a few months.

After 1^st January 2016, all investors must adhere to the Application Supported Blocked Account (ASBA) procedure. Some investors may want to know how to apply for an IPO under ASBA. Here are the steps involved while applying for an IPO.

1. Under ASBA, investors may easily apply for an IPO through their bank accounts. They must submit the ASBA forms, which are available at all designated branches of the syndicating bank. Investors must provide the details, such as applicants’ names, permanent account number (PAN), demat account number (Read more on how to open a demat account), and the bid quantity and price. It is important to provide instructions to block the entire amount needed to apply in their accounts.
2. The bank accounts of all investors who are allotted the shares as per the allotment basis will be debited by the respective amount.
3. Banks upload all the information of the applicants on the bidding platform. It is important that investors ensure only accurate information is provided in the ASBA form to avoid rejection. Furthermore, it is the responsibility of the investors to maintain sufficient balance in their bank account and furnish accurate information.
4. Investors may easily generate the e-form from the National Stock Exchange (NSE) website. The form is also available on the website of the Book Running Lead Manager (BRLM).
5. Some investors would also like to know how to invest in an IPO They may apply through the link available on the online trading platform of the syndicating bank.

IPO applications are available only to individual investors. Hindu Undivided Family (HUF), companies or trusts are not allowed to apply for an IPO. Under the ASBA procedure, the maximum amount determined by the highest price bid by the applicants will be blocked until the allotment is finalized.

Latest IPOs
Some recent offerings, such as MAS financial, Capacite Infraprojects, and Godrej Agrovet have seen 35% to 45% price increases over their issue price. Several companies including small and medium enterprises (SMEs) have applied to the Securities and Exchange Board of India (SEBI) for an IPO issue. Here are five recent IPOs that hit the market.

1. Shalby Ltd.

The issue opened on 4^th December 2017 and ended on 7^th December 2017. It was a book building offer for 68 million shares at an issue price band between INR 245 to INR 248. The face value of the shares was INR 10, which translates to a premium of INR 238 per share.

2. Ratnabhumi Developers

The company was offering 3.5 million shares in its IPO that commenced on 4^th December 2017 and ended on 6^th December 2017. The face value of each was INR 10 and commanded a premium of INR 53. The IPO price per share was fixed at INR 63.

3. MRC Exim Ltd.

Almost 2.8 million shares at INR 15 per share are being offered to the public investors. The issue opened on 6^th December 2017 and closes on 8^th December 2017.

4. Dynamic Cables Ltd.

The issue opened on 4^th December 2017 and ended on 6^th December 2017. The issue comprised 5.5 million shares at a price of INR 40. The face value of the share was INR 10, which means the issue was at a premium of INR 30 per share.

5. Future Supply Chain Solutions Ltd.

This IPO opened on 6^th December 2017 and closes on 8^th December 2017. The INR 10 face value share is being offered at a premium of INR 654. The IPO is being issued at a price band between INR 660 and INR 664 per share with almost 3.4 million shares being on offer.

The good performance of IPOs in the share market has seen a surge in investments. However, investors are advised to be cautious and avoid investing in too many public offerings in the longer term. If an individual invests in every IPO, it is recommended he exits his investment on listing to ensure he does not suffer from major losses in the future.