How to apply for an IPO in India, step by step
ASBA, UPI mandates, lot sizes, allotment and listing day — a plain-language walkthrough of applying for an IPO from your demat account.
An initial public offering (IPO) is when a company sells shares to the public for the first time and lists them on a stock exchange. Applying has become a few taps in a broker app, but the mechanics behind those taps decide what you pay, when your money moves and why you may get nothing at all.
What you need before you apply
- A demat and trading account with a broker, linked to your PAN.
- A bank account that supports ASBA or a UPI ID linked to it.
- The offer document. The red herring prospectus (RHP) is filed with SEBI and the exchanges. It explains the business, the risks, how the money will be used and who is selling.
ASBA and the UPI mandate: your money stays put
India uses ASBA — Application Supported by Blocked Amount. When you bid, the amount is blocked in your bank account, not debited. It still sits there, but you cannot spend it until the process ends.
Most retail investors now apply through their broker’s app using UPI:
- You place a bid in the app.
- Your UPI app shows a mandate request. You must approve it, usually before a cut-off on the last day of the issue.
- Once approved, the amount is blocked.
If you forget to approve the mandate, your bid is not valid — a common and avoidable mistake. You can also apply directly through your bank’s net banking ASBA facility.
UPI and ASBA limits for IPO applications are set by regulators and banks and can change, so check your bank and the SEBI website if you plan to bid a large amount.
Price band, lot size and categories
An IPO usually has a price band — a lower and upper price — and a lot size, the minimum number of shares you must bid for. You bid in whole lots.
Investors are split into categories: retail individual investors, non-institutional investors (often called HNIs), qualified institutional buyers, and sometimes employees or existing shareholders. Each category has its own share of the issue and its own maximum application size, set out in the RHP.
Retail investors can usually tick “cut-off”, which means you agree to pay whatever final price is fixed within the band. This avoids being left out if you bid low.
A worked example (illustrative numbers)
Suppose an imaginary company launches an IPO with a price band of ₹200–₹210 and a lot size of 70 shares. These numbers are made up for the example.
| Lots bid | Shares | Amount blocked at ₹210 |
|---|---|---|
| 1 | 70 | ₹14,700 |
| 3 | 210 | ₹44,100 |
| 5 | 350 | ₹73,500 |
You bid 3 lots at cut-off, so ₹44,100 is blocked. If the final price is fixed at ₹210 and you are allotted 1 lot, ₹14,700 is debited and the remaining ₹29,400 is unblocked. If you get nothing, the full amount is released.
How allotment works
When an issue is oversubscribed — more shares applied for than offered — not everyone gets shares. For retail investors, SEBI’s rules aim to give the minimum lot to as many applicants as possible, so allotment is typically done by a computerised lottery among valid applications.
That has a practical consequence: in a heavily oversubscribed IPO, bidding for 5 lots instead of 1 does not usually multiply your chance. It just blocks more money. Some families apply from separate PANs and demat accounts, each a genuine individual application, for this reason. Multiple applications from the same PAN are rejected.
The registrar to the issue publishes the allotment status. You can check it on the registrar’s website or the exchange site using your PAN or application number.
Listing day
Allotted shares are credited to your demat account shortly before listing. SEBI has shortened the gap between the issue closing and listing in recent years; the exact timeline for each issue is printed in its RHP.
On listing day, the exchange runs a special pre-open session to discover the opening price. The stock may open above the issue price (a “listing gain”), at it, or below it. That first price reflects demand on one day — not whether the business will do well over the next ten years.
What to do: an IPO checklist
- Read the RHP’s risk factors and objects of the issue. Is the money funding growth, or are existing shareholders mainly selling?
- Compare the valuation with listed peers rather than relying on grey-market chatter, which is unofficial and unregulated.
- Decide your amount in advance, and keep it a small part of your portfolio.
- Bid at cut-off if you are a retail investor and want to be considered at the final price.
- Approve the UPI mandate the same day.
- Check allotment on the registrar’s site, and confirm the unblocked amount in your bank.
- Have a plan for listing day — hold for the long term or exit — before emotions take over.
New to market terms? Our glossary covers the basics, and what the Sensex and Nifty measure explains the indices new listings may one day join.
This article is educational and is not a recommendation to apply for any IPO. Investments in securities are subject to market risks; read the offer document carefully.
This article is for education only, not personalised investment, tax or legal advice. Rules and rates change. Check the latest official sources or a qualified professional before acting. Spotted an error?Tell the editor.
