Why PAN is Essential for Apply IPO:
Now, we have all understood that PAN is a crucial thing that is used everywhere you go. Whether you are applying for a job or you are planning to start a business. Anything you do will require the PAN number. As an Indian citizen, I believe, you all have your PAN.
If you still do not have then apply for it today only. If you are a college student and planning to start your trading career soon. And yet do not know where to begin?
Then I will suggest, it is not too late, you still have enough time to be a trader. For that, you need to do many studies. Like you are reading this about this topic which PAN.
Like so, there are multiple steps you need to read about it to start. And if you are new to trading you must do it from tip to toe. Now, I will explain today how PAN is so crucial for selling or for applying to IPO.
You must open your first bank account because for applying IPO, it is a fundamental thing to have a bank account. As we all know, we all require a PAN card to open a bank account. So, this was to first use of PAN in the process of buying an IPO. Because most of the time it has been observed, traders use net-banking for buying an IPO. As a few banks work as your full-service broker. Has So, it is a must to open a bank account and then Net-banking.
Your PAN number is needed to open your first Demat account, which is again a crucial thing for IPO. Now, what is this account all about? If you are starting or willing to start trading or investing in the stock market, you must have heard of the term Demat a lot. Demat Account is a Dematerialized account. That is, it dematerialized your physical security and enables you to hold onto your financial instruments in an electronic form.
How will you open this account? We require help while opening a Demat account. Cause we cannot open it on our own. Now, who helps us, monitor, or guide us in the whole process of opening a Demat Account? A brokerage firm or your brokers will do that. So, here is the catch, as your new to trading then, I believe you have not opened your account with a broker yet. Then you should open an account with a brokerage firm. For doing so, you will require your PAN number. Because of the brokerage firm, whether it is a full service or discount broker, they will ask you for your PAN number.
Now, comes the fourth use of PAN for apply IPO. Many traders out there, who not only buy IPO buy also sell them on the stock exchange. If someone is planning only to buy IPO and not sell them, then, having a Demat account is enough. But most of the traders sell shares after it gets listed on the stock exchange. So, for selling, we must have a Trading Account again repeating it is a must. So, again you will be required your PAN to open your trading account.
Now, at the time of buying whether you are buying through online or offline mode, at the time of buying, you need to provide your PAN as an identity proof. According to SEBI, PAN has become mandatory to apply for an IPO.
There is much usefulness of PAN, in each step of applying IPO you need to submit your PAN number. So, PAN is one of the essential things in the entire process of trading. Whenever you decide to sell/buy shares on the primary/secondary market. Each time you make a payment for buying or selling the IPO if the amount exceeds 50,000, you will be required to submit your PAN number. It is a necessary document to have.
