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If you are looking towards making a short-term gain, investing in an Initial Public Offering or IPO might be effective for you.

IPO is the process that private companies follow to go public and get traded across stock exchanges such as the National Security Exchange (NSE) or the Bombay Stock Exchange (BSE) or both.

In 2025, the IPO market witnessed several private companies going public, raising INR 51,365 crore. It also shows a steep increase from last year, and if you are seeking to grab such a potential opportunity, learn about IPO in detail.          

A Brief About Initial Public Offering or IPO

When you hear that a certain company is launching an IPO, you must understand that the company, through this process, will be distributing its shares to the public who applies for them. Once the IPO process is complete, it makes the respective private company a publicly traded company and its shares start trading on the stock market.

Aside from the transition from private to public, when you invest in IPO and, along with investment from other retail, HNI, and institutional investors, the inflow of funds helps the company to fuel its growth, repay its existing debt, help with expansion and more.

From the perspective of an investor, you might be able to capitalise on the listing gains. It means if it opens at a higher price compared to its offered price during the IPO, you make a profit.

Different Types of IPOs

1.    Book Building Method

It acts like an auction of shares. Here, companies typically set a price range or a price band. Investors take part in the IPO bidding process to state how many shares they intend to purchase. Upon reviewing the bids, companies determine a cut-off price. Investors who have placed bids at or beyond that price typically receive shares based on availability.

2.    Fixed-Price IPO Offering

Unlike the book building approach, there is no bidding process in this. Here, IPO-issuing companies set a fixed price per share. Thus, this method does not allow investors to impact share prices that happen in an IPO bidding.

A Detailed Breakdown of an IPO Process

Now that you know the IPO meaning and its type, take a look at the detailed journey of how a private company goes public through an IPO:

1.    Decision of Going Public and Documentation

Upon evaluation of growth prospects, needs, readiness and the prevailing market conditions and other factors, a company decides to go public. They hire underwriters to take care of the IPO process. The company also outlines its business model, finances, IPO terms and other factors in a Draft Red Herring Prospectus (DRHP) and submits it to the SEBI for approval.

2.    Exchange Selection and Marketing

An IPO-issuing company then chooses between stock exchanges such as the BSE or NSE or both. They also promote their IPO through an IPO roadshow and attract potential investors.

3.    Bidding or Fixed Price Offering

For book-building IPOs, as an investor, you must place bids in a price range and specify how many shares you want to subscribe for. For a fixed-price offer, you must apply for the number of shares you want to subscribe to at the pre-determined issue price. Note that for both settings, you subscribe in terms of IPO lot size.

4.     Share Allotment

While allocating shares, companies consider whether the IPO is over- or undersubscribed. Underwriters purchase the unsold shares if an IPO is undersubscribed. For oversubscribed ones, you get shares allocated based on pro-rata allotment, lotteries, etc. Companies issue a refund if you do not get an allotment.

5.    Listing on Exchanges

On the listing day, the company shares start getting traded on their chosen exchange. Here, if the listing price is higher than the offer price, you book a profit by selling shares and exiting the market. However, you might choose to stay invested if you have a long-term goal.

Conclusion

Building your career but thinking of accumulating wealth from an early stage? Then, you are on the right track, as at an early age, not only are your responsibilities low, but your risk-taking capability is high.

Looking at the broader investment marke Indian investors are investing in the stock market. A significant portion of Indians are investing in mutual funds, too.

All these indicate that Indians are creating portfolios for wealth creation for their future, and if you are curious, read this blog.

3 Crucial Strategies to Build Your Fir t Portfolio in 2025

1.    Assess Your Risk Appetite

First, like every other investor, you must assess your income, its stability, and consider other factors to determine your risk profile. Ask yourself whether you are ready to make an investment in high-risk assets like equity stocks or need stable growth by investing in low-risk assets.

For example, if you have a high-risk appetite, you might want to choose to invest in stocks with strong fundamentals. For this, you must create a dematerialised or a Demat account.

If you do not know what a dematerialised account means, it simply stores your purchased stocks in a digital format, which you can sell when they are profitable using your trading account.

With a low risk appetite, you might resort to mutual funds. About  Indians are invested in mutual funds. You can invest in such funds with a higher interest rate via SIPs or a lump sum and see your corpus grow over the years. 

2.    Diversify Through Optimal Asset Allocation

If you are aware of the proverb in investments that goes ‘do not put all eggs in one basket’, it means avoid investing in a single type of asset. Rather, you diversify your investment across different asset classes.

For example, when investing, sticking only to equities might result in losses as the stock market is highly volatile. Spread your investment across other assets such as government and corporate bonds.

With government bonds, you might get u   interest that also comes with higher security against defaults. Corporate bonds might provide a bit higher return, but you must check company fundamentals and other factors, as risk might be higher.

Also, you can spread your investments across gold ETFs, REITs (if your investment capital supports), index funds, etc.

3.    A Periodic Visit to Your Portfolio

Creating an investment portfolio requires a periodic visit and implementing changes, if necessary. You must visit your portfolio at least once a year to check its performance and alignment with your investment goals.

For example, you have started by investing 70% in equities and 30% in debt. Suppose a market rally pushed equities to 85%, breaking your initial or desired portfolio balance. Here, you must sell a portion of your equities and reinvest in debt instruments to restore balance.

Similarly, suppose you have invested in both equity and debt-oriented mutual funds. If your equity fund has outperformed your debt fund, you might redeem a part of the equity fund and shift it to the debt fund to maintain your desir turn ratio.

Consider the additional expenses, such as DP charges. If you are wondering what are dp charges, it is a fee that your broker levies when you sell shares. There are exit loads on mutual funds. They might seem small, but with time they accumulate to a higher amount.

Conclusion

Have you just started your career or in the middle of it, and yet do not have a financial plan in hand? In India, the medical expenses are risin  annually, whereas the educational inflation ha a year. 

These increasing costs, along with hikes in daily expenses, might make your living a bit hard and challenging if you do not plan your finances as you age.

Read this blog and learn how, with your age, you must plan, invest and save for the future.

What Does a Financial Goal  for You?

You can think of your financial goal as a milestone in your life that you must achieve to secure your future. Based on your financial goals, ranging from short-term to long-term, you can build optimised spending and saving habits along with an investment discipline.

To understand which aspects of your financials you must focus on with a goal, let us resort to an example. As of 2025,  30% of 33.1 crore (331 million) are currently carrying debt. Thus, if you have an ongoing debt, you can clear it within a reasonable time with a proper goal.

Other aspects that you can fulfil with such a goal are building an emergency fund, buying a house, saving for children’s education, saving for retirement and more.

Start Early and Small During Your 20s

If you are in your 20s and have fewer financial responsibilities, you might have a higher risk tolerance. However, as a beginner, you must start small and decisive:

1.    Invest in Safe Avenues

As a beginner, you might choose to invest in mutual funds, as it will let you learn how the stock market works and earn potential gains at the same time. Mutual funds typically deliver an annualised return o tart early with an SIP and gradually build a corpus over time.

2.    Follow 50-30-20 Rule

If you have a stable income already, following a 50-30-20 rule might be effective for your goal. According to this rule, spend 50% of your monthly income on necessities like groceries, medical, and utilities. Spend 20% on hobbies, subscriptions, holidays, etc. Save the remaining 20% and preferably invest in mutual funds, fixed deposits or keep them in your savings account.

3.    Avoid EMIs

In India, salaried individuals reportedly spen of their monthly income on EMIs. Being in your 20s, building a corpus must be your focus, as people usually begin their career at this point. Therefore, avoid buying unnecessary gadgets or items on EMIs to save more.

Grow Faster With Planning in Your 30s

As you step into your 30s, further responsibilities add up. People at this age typically plan to buy a house or might start making family planning or more. Here is what you should do:

1.    Plan for Family and Retirement

You must start planning for your family, like setting aside funds for your children's education, retirement and more. For example, you can try to contribute up to 15% of your salary to your retirement funds.

2.    Modifications in Investments

If you are investing in the stock market, diversify your investment focus to spread risk. You can build a portfolio with a mix of equities, debt instruments and other assets. If you are into intraday trades, converting intraday to delivery might be wise, as the risks of day trades might impact your savings more at this stage. 

Protect Your W  Your 40s

As you are stepping into your 40s, your primary financial goal should shift from growing wealth towards protecting it:

1.    Restructure Your Portfolio

At this age, you must focus more on stable securities in terms of investments. For example, you have invested 30% in equities and 70% in debts in your 30s. By your 40s, you might want to shift to 40% in equit in debt. Consulting portfolio management services in India might be a good option to make such an informed financial decision.

2.    Upgrade Medical Insurance

As you age, health complexities also rise. With an already inflated healthcare economy, you might face difficulties affording treatment if necessary. Therefore, upgrade your medical insurance and coverage at this age.

Conclusion

Investing in mutual funds used to require paperwork and lengthy waiting periods. However, the advent of Demat accounts has made your investment experience simpler, faster, and more secure. Demat accounts are driving the growth of mutual fund investments in India by offering regular investors transparency over their portfolios. This blog explains how Demat accounts are driving India’s mutual fund popularity.

What is a Demat Account in the Share Market?

Before jumping on the increasing popularity of mutual funds in India, let us understand the Demat account meaning first. A Demat account allows you to hold your purchased securities electronically. Holding securities online allows you to avoid the time-consuming task of managing physical securities.

With a Demat account, you can avoid using paper certificates by dematerialising your securities. Using Demat accounts ensures security and saves you from manual work. A Demat account also enables you to employ electronic Delivery Instruction Slips (e-DIS). This slip contains all of the information required for a flawless transaction of securities.

The Growing Popularity of Mutual Funds in India

As of June 2025, the Indian mutual fund sector has an Asset Under Management (AUM) of INR 74.40 lakh crore. This represents a more than sevenfold increase over the previous decade. According to a Motilal Oswal Mutual Fund survey, the majority are equity accounts, which are 59.94%, followed by debt accounts comprising 26.53%, hybrid accounts of 8.28%, and other categories comprising 5.26%.

With the help of Demat accounts, the systematic investment plans (SIPs) remained the primary driver of retail involvement. The monthly SIP inflows in August 2025 reached INR 28,265 crore, which is up 20% year on year.

While the overall number of SIP accounts fell by 0.2%, the average monthly ticket size increased to INR 2,947.

How Demat Accounts Make it Easier to Invest in Mutual Funds?

Using a Demat account to invest in mutual funds can be easier. Here are the reasons why you should know how to open Demat account for investing in mutual funds:

Safety From Physical Damage

Using a Demat account to invest in mutual funds eliminates the possibility of your assets being destroyed, lost, or stolen because they are held electronically.

Single Platform

A Demat account provides you a particular storage to store all of your investments. This makes it easier to track and manage your money, as well as make sound investment decisions that will provide high returns.

Ease of Nomination

When you open a Demat account, you have to designate a nominee to whom your Demat account assets will transfer in your absence. Using a Demat account for mutual funds makes nomination easier because all of your assets may be quickly transferred to your heir.

Loan Application

Applying for loans with Demat mutual funds is significantly more convenient than if you held your mutual funds physically.

How to Invest in Mutual Funds in India?

Follow the steps below to open a Demat account in India:

Download the application of your preferred broker from any app store.

Navigate to the ‘Account’ section and click on the ‘Profile’ option.

Fill out the form by providing your mobile number and email address. Enter the two OTPs you have received in your mobile number and email for verification.

For instant e-KYC, provide your PAN number and your name.

Verify your Aadhaar number with an OTP sent to your Aadhaar-linked mobile number.

Allow access to your Digilocker to set up a Demat account.

Final Thought

As of June 2025, the total number of Demat accounts in India stood at 20.16 crore. However, do you know that people under 30 account for 75% of new account openings? In the rapidly growing financial landscape of 2025, a Demat account guarantees the safety of your investments. This blog explains why every investor must have a Demat account in 2025.

What is a Demat Account?

A Demat account is similar to a bank account. A Demat account holds assets, such as equities, mutual funds, and exchange-traded funds (ETFs) in one place. Using a Demat account, you can simply transfer your shares and provide a signed Delivery Instruction Slip (DIS) to your depository participant (DP).

In addition, Demat accounts allow you to get dividends, bonus shares, stock splits, interest, and refunds.

Why Every Investor Needs a Demat Account in 2025?

Investors in 2025 must have a Demat account for its multiple benefits. Below are the benefits of Demat account:

1. No Risk of Theft

A Demat account offers a safer alternative to physical shares, eliminating the risk of theft, damage, or loss due to its electronic nature.

2. Efficient Trading

The number of investors is increasing daily. However, Demat accounts provide electronic trading and smooth settlement, which expedites the purchasing and selling of assets.

3. Multiple Access Point

Most investors in 2025 prefer mobile-based investing. Since a Demat account is managed online, investors may access it from a variety of devices, including smartphones, tablets, laptops, and PCs.

4. Convenient Transfer of Shares

It is easy to move securities from one Demat account to another. This guarantees seamless ownership transfers. It makes transferring stocks to heirs and estate planning easier.

5. Loan Facilities

You may also open Demat account to pledge your securities as security for margin trading or borrowing.

Demat Account Opening Requirements

Having a Demat account in 2025 is necessary, but you must also know the account opening requirements, which are described below:

Opening a Demat account in 2025 requires meeting certain know your customer (KYC) standards set by the Securities and Exchange Board of India (SEBI).

Along with a cancelled cheque or bank statement, you will need to provide your proof of identity, proof of address, and a passport-sized photo.

If you want to trade futures and options (F&O), you may need to register your email address and mobile number and provide income proof.

While opening an account, only select DPs who are registered with the SEBI. 

If you just have one Demat account linked with your PAN and the total value of your holdings is less than INR 10 lakh, a BSDA could be generated automatically.

Final Thought

Portfolio Management Services and Alternative Investment Funds are two distinct avenues for sophisticated investors in India. In 2025, PMS assets crossed INR 37 lakh crore. On the other hand, AIF commitments are growing at nearly 31% CAGR at the same time. This shows that Indian investors are increasingly considering these based on requirements.

Read this blog to understand what they mean, what their differences are, and which one is suitable for you. 

A Brief About Portfolio Management Services in India

The SEBI-registered Portfolio Management Services or PMS providers tailor an end-to-end solution to boost the portfolios of investors in India. 

Key characteristics of a PMS provider include the following that you must know about:

Such service providers target high-net-worth or ultra-high-net-worth individuals (HNIs and UHNIs).

They manage investable assets worth INR 5 crore or more for HNIs. For UHNIs, they manage investable assets of more than INR 25 crore.

If you are an HNI or UHNI, PMS providers will closely monitor your portfolio. Based on your portfolio status, they offer timely and expert investment guidance, rebalance your portfolio as per market trends and make informed investment decisions. 

A Quick Glance at Alternative Investment Funds or AIF

This type of fund invests in assets, unlike the traditional ones such as stocks, bonds, mutual funds, commodities, etc. 

The following are some AIF characteristics that separate it from traditional investments:

The Alternative Investment Funds invest in assets such as unlisted or private equity funds, debt instruments, SMEs, real estate, hedge funds, etc. 

They are split into 3 different categories depending on the asset types, and with higher risks, they generate potentially higher returns.

Similar to the PMS, the AIFs are also suitable for HNIs, institutional investors such as banks, insurance companies, pension funds, etc. 

Portfolio Management Services vs Alternative Investment Funds: Key Differences

Factors like investment capital, fund category, lock-in period and more separate the two:

Parameters 

Portfolio Management Services 

Alternative Investment Funds

Minimum capital for investment

For such services, the minimum capital that you need is INR 50 lakh

You need at least INR 1 crore to begin your investment in this option.

Categories 

You can choose from 3 PMS options, such as non-discretionary, discretionary, and advisory.

You can invest in Category I funds involving growth-focused businesses. Choose category II for private equities and category III for derivatives or hedge funds.

Lock-in Period

There is no strict lock-in period in a PMS.  

When you invest in either Category I or II AIF, a lock-in period of at least 3 years applies. Category III AIF might or might not have a lock-in period.

Number of allowed investors 

There is no strict number, and your PMS provider can have multiple investors or clients.

Your AIF managers can have up to 1000 investors to manage.

Which One to Choose Between PMS and AIF?

Choose one to manage your portfolio professionally or explore beyond traditional assets:

Opt for a PMS if you want to ensure proper asset allocation, diversification, tax planning, etc., as a service. 

If you are starting an investment from scratch, a PMS provider will provide you with a free Demat account.

Choose an AIF if you want to explore assets beyond traditional ones, have a high risk tolerance and want to diversify your portfolio with real estate, private equities, etc.

Conclusion

As of July 2025, the total turnover of equity derivatives on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) to date has been INR 14,769 lakh crore and INR 9,070 lakh crore, respectively. 

This data shows that derivatives like futures and options play a pivotal role in the Indian financial ecosystem. However, many investors seeking derivative trading often find it challenging to understand the differences between these two derivative contracts.

Let us understand some key differences between options and futures in simple words for new investors.

Differences Between Options and Futures

Futures contracts impose an obligation on a buyer or seller to purchase or sell an asset at a fixed price on a future date. Contrarily, options grant a buyer the right, but not the obligation, to purchase or sell an asset on or before a given date at a particular price. The table below highlights the key differences between options and futures:

Parameters

Options

Futures

Profit or Loss Potential

Buyers can make unlimited profits, but their losses are limited to the premium they have paid.

Unlimited profits and losses

Risk

While sellers can be more vulnerable to losses, buyers are only at risk up to the premium they paid.

High risk due to the exposure to changes in the market.

Execution

The option may be exercised by the buyer at any time before its expiration. It is not exercised automatically. Certain contracts that are in-the-money upon expiration are automatically executed.

Automatically exercised on the expiry date.

Minimum investment

The buyer has to pay a non-refundable premium to the seller.

No minimum investment is needed other than a margin payment.

Flexibility

Options are highly flexible, as buyers may choose not to exercise the option and let it expire.

Futures contracts are less flexible since the trade should be completed.

Use Case

Ideal for trading in market uncertainty.

Primarily used for hedging or speculation.

Liquidity

Lower liquidity than futures in some markets.

Highly liquid in the index markets and commodities.

Value Decay

Vulnerable to time decay, which decreases the value at the time of expiry.

No time decay impact.

Understanding Options With Example

You believe that the share price of company ABC will rise after 60 days, which is currently trading at INR 50. With a two-month expiration date, you purchase a call option at a strike price of INR 70. You have paid INR 10 as a premium for this call option.

Scenario 1: You can exercise your call option and purchase the stock at INR 70 if the price reaches INR 90 before the expiration date. Your profit will be:

Current price of stock – strike price – premium

INR (90 – 70 – 10) per share = INR 10 per share

Scenario 2: if the price stays at INR 60 instead of reaching INR 70. You have the option to let the contract expire and not exercise it. Only the INR 10 premium will be lost.

Understanding Futures With Example

Continuing with the previous example, you believe that the share price of company ABC will rise after 60 days, which is currently trading at INR 50. You purchase them at a two-month expiration date with INR 70 per share.

Scenario 1: You can purchase the stock at INR 70 if the price reaches INR 90 before the expiration date. Your profit will be:

Current price of stock – Price you have paid – margin

INR (90 – 70 – margin) per share = INR 20 per share - margin paid

Scenario 2: If the price stays at INR 60 instead of reaching INR 70. You have to purchase it for INR 70. Your total loss will be:

(70 – 60 – margin) per share = INR 10 per share – margin

Differences Between Futures and Forward Contracts

Since a forward contract is almost similar to a futures contract, you need to understand the key differences between forward and futures contract. The table below highlights the key distinctions:

Parameters

Forward Contract

Futures Contract

Standardisation

Bilateral contracts that can be customised.

The exchange specifies standardised terms to maintain uniformity and a set lot size.

Regulation

Private and flexible, and are not regulated.

Traded on exchanges with regulation.

Margin requirements

No need to pay collateral since the parties negotiate the contract.

The parties have to deposit an initial margin and keep a maintenance margin to compensate for potential losses.

Risks

High bilateral default risk.

Minimal risk due to exchange clearing houses.

Final Thought

The investment portfolios of investors include investments in stocks, mutual funds, bonds, and other assets. However, they do not have enough time to measure the risk profile of their portfolios. Portfolio management services (PMS) are a particular financial management service where stock market professionals manage your investment portfolio. Let us understand the concept of PMS, including its various types and benefits.

Understanding Portfolio Management Services

PMS is a particular type of wealth management services that provide investment solutions to investors to meet their investment goals. While wealth management definition is a comprehensive approach to managing money, PMS creates and manages diversified investment portfolios including different asset classes.

PMS are popular among groups like High-Networth Individuals (HNIs), Hindu Undivided Families (HUFs), partnership firms, Non-Resident Indians (NRIs), and Sole Proprietorships. Individuals who are considering building a strong investment portfolio can opt for PMS.

Types of Portfolio Management Services

Portfolio managers take a different approach based on the type of PMS. Below are the four types of PMS services:

Active Portfolio Management

The primary goal of portfolio managers is to maximise returns. Therefore, this type of PMS service allows managers to actively monitor the market situation. 

Passive Portfolio Management

In this type of PMS, the portfolio managers maintain a predefined strategy and avoid frequent changes to portfolio allocation, rebalancing, and composition. This type of PMS considers fixed profiles that are aligned with the current market trend.

Discretionary Portfolio Management

The portfolio managers follow an appropriate strategy based on the risk tolerance, objectives, and investment duration of the investors.

Non-discretionary Portfolio Management

This type of PMS service allows portfolio managers to act as advisors who provide recommendations to the investor. While acting as a facilitator, the managers are not responsible for the performance and risk of the portfolio.

Benefits of Portfolio Management Services

The primary objective of PMS is to minimise the risk and volatility of the portfolio and achieve the desired return on investment (ROI). Below are some of the benefits of using portfolio management services:

Ensures Higher Returns

Ensuring higher returns is one of the primary benefits of using PMS. It provides a framework for market analysis and helps investors select the best securities for high returns. Efficient portfolio managers can help investors get higher returns even if they have limited funds.

Efficient Risk Management

In addition to reducing the risk of investments, PMS increases your returns. Their approach to diversifying your returns protects you from suffering a loss after a change in market trends.

Transparency and Flexibility

PMS maintains transparency by offering detailed reports on risks, performance and returns of your portfolio. It also provides flexibility and convenience to the investors, so they do not have to worry about their portfolio management. Inventors can also switch portfolio managers and their strategies as per their satisfaction.

Rebalancing

PMS also includes rebalancing your portfolio, which enhances the profit generation of your portfolio. It not only helps the investors but also the portfolio managers to reduce the risk and ensure higher profits.

Final Thoughts