Online retail brokerage Paytm Money has introduced a new service through which retail investors can pre-book IPO allotments before market hours.The move comes ahead of IPOs of several high-profile startups and corporations such as Zomato, Life Insurance Corp of India (LIC), Paytm, PolicyBazaar, Care Health and Nykaa.
Retail investors will be able to request for allotment of shares in an initial public offering ahead of opening of the issue on BSE and NSE, according to media reports.
Currently, retail investors can apply for allotment of shares only when subscriptions are live.
"When we spoke to our customers, we found that a lot of them were enthusiastic about the upcoming IPO rush. We wanted to create a service that takes away the panic and confusion of purchasing offers on the day of the IPO issue. A pre-booking service will allow investors to make planned purchases," chief executive Varun Sridhar told The Economic Times.
The pre-booking service will allow investors to make planned purchases ahead of the IPO. This is the first such initiative by an online brokerage in India, said Paytm Money.
"Interest in IPOs has surged over the last couple of months, and we have seen cases where users have missed out from applying because of issues like tight schedules during market hours, and demand led processing delays in the markets," Sridhar added.
The service allows customers to make a purchase request for shares to the brokerage.
When an issue goes live, the brokerage would buy allotments for all the requests it has received from customers. However, all requests made for the pre-purchase may not result in allotment depending on the size , demand and the premium of IPO.
Those who receive allotment during the new service will have to clear the payment of shares on their UPI app within 24 hours.
The feature will first go live on the Paytm Money app for the upcoming Zomato IPO on July 14-16.
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