Introduction
Applying for an IPO in India has become incredibly simple thanks to digitization and the ASBA (Applications Supported by Blocked Amount) process. This guide walks you through every method available to retail investors, ensuring you can confidently apply for your first IPO.
Prerequisites for IPO Application
Before you can apply for any IPO, ensure you have:
- Demat Account: Required to hold shares electronically
- Trading Account: Usually comes with demat account
- Bank Account: Linked to your demat and UPI
- PAN Card: Mandatory for all securities transactions
- UPI ID: For retail applications (most convenient method)
Understanding ASBA Process
ASBA (Applications Supported by Blocked Amount) is mandatory for all IPO applications in India. Here's how it works:
- You submit your IPO application
- Your bank blocks the application amount (doesn't debit)
- If you get allotment, the blocked amount is debited
- If you don't get allotment, the block is released
Benefit: Your money earns interest while blocked, and you can still see the full balance.
Method 1: Apply Through UPI (Recommended)
The easiest and most popular method for retail investors.
Step-by-Step Process
- Login to Your Broker App: Open Zerodha, Groww, Upstox, or any broker app
- Navigate to IPO Section: Usually under "IPO" or "New Offerings"
- Select the IPO: Choose the IPO you want to apply for
- Enter Application Details:
- Number of lots (or shares)
- Bid price (use "Cut-off" for best chances)
- Enter UPI ID: Your registered UPI ID (e.g., name@upi)
- Submit Application: Review and submit
- Approve UPI Mandate: Open your UPI app within 24 hours and approve the mandate request
Important: Mandate Approval
After submission, you must approve the mandate in your UPI app:
- Open your UPI app (Google Pay, PhonePe, Paytm, etc.)
- Go to "Mandate" or "Auto-pay" section
- Find the IPO mandate request
- Enter your UPI PIN to approve
- Application is confirmed only after mandate approval
Deadline: You must approve within 24 hours or by 5 PM on IPO closing day (whichever is earlier).
Method 2: Apply Through Net Banking (ASBA)
Major banks offer direct IPO application through net banking.
Step-by-Step Process
- Login to Net Banking: Access your bank's net banking portal
- Find IPO Section: Usually under "Investments" or "Demat Services"
- Select IPO: Choose from available IPOs
- Enter Details:
- Demat account number
- PAN number
- Number of shares/lots
- Bid price
- Confirm Application: Review and submit
- Receive Acknowledgment: Note down application number
Supported Banks
Most major banks support ASBA, including HDFC, ICICI, SBI, Axis, Kotak, and others.
Method 3: Apply Through Broker Platforms
All major brokers offer IPO application services.
Popular Platforms
| Broker | Platform | Method |
|---|---|---|
| Zerodha | Kite App/Web | UPI |
| Groww | Groww App | UPI |
| Upstox | Upstox App | UPI |
| Angel One | Angel App | UPI |
| HDFC Securities | HDFC App/Web | ASBA/UPI |
IPO Application Form Details
When filling the application, you'll need to provide:
Personal Details
- Name (as in demat account)
- PAN number
- Demat account number (DP ID + Client ID)
- Bank account number
Bid Details
- Number of Lots: How many lots you want (1 lot = minimum shares)
- Bid Price: The price at which you're willing to buy
- Cut-off Option: Agree to pay whatever final price is set
Understanding Cut-off Price
When you select "Cut-off price":
- You agree to buy at the final issue price
- Amount blocked = Upper band × Shares
- If final price is lower, excess amount is released
- Recommended for retail investors to avoid rejection
Bid Price Strategy
For retail investors:
- Always Use Cut-off: If you specify a price lower than the final price, your application is rejected
- Maximum Safety: Cut-off ensures acceptance if you get allotment
How Many Lots to Apply?
For retail category (up to ₹2 lakh limit):
- Lottery-based allotment means probability is same whether you apply for 1 lot or maximum lots
- Strategy: Apply for minimum lots from multiple accounts (family members)
- Calculate maximum lots: ₹2,00,000 ÷ (Lot Size × Upper Band Price)
Common Mistakes to Avoid
- Not Approving UPI Mandate: Your application is invalid without mandate approval
- Wrong Demat Details: Mismatch leads to rejection
- Bidding Below Cut-off: Can result in rejection if final price is higher
- Insufficient Balance: Must have full amount available for blocking
- Multiple Applications Same PAN: Only one application per PAN per category
- Last Minute Applications: Technical issues can prevent submission
After Submitting Application
- Note Application Number: For tracking purposes
- Approve Mandate: If using UPI (within 24 hours)
- Wait for IPO to Close: Usually 3-5 days
- Check Allotment Status: 3 days after closing
- If Allotted: Shares credited to demat
- If Not Allotted: Blocked amount released
Modifying or Canceling Applications
You can modify or cancel your application during the IPO period:
- Through the same platform used for application
- Modify bid price or quantity
- Cancel entirely (UPI mandate must be revoked too)
- Not possible after IPO closes
Conclusion
Applying for IPOs in India is straightforward once you understand the process. Use the UPI method for convenience, always bid at cut-off price, and ensure your demat and bank details are correct. With practice, you'll be able to apply for IPOs in minutes. Remember to apply only after researching the company – not every IPO is worth investing in.