How to Apply for an IPO in India: Step-by-Step

An IPO, or Initial Public Offering, is when a private company sells its shares to the public for the first time. It is one of the most exciting events in the stock market — investors get a chance to buy shares at the offer price before they start trading on the exchange. Many Indian IPOs have given excellent listing gains, which is why they attract so much attention.

In this guide, we will explain exactly how to apply for an IPO in India, step by step, even if you have never done it before.

What Is an IPO and Why Should You Care?

When a company wants to raise money for expansion, debt repayment, or other purposes, it can offer its shares to the public through an IPO. Before the IPO, the company is private — its shares are not traded on any stock exchange. After the IPO, the shares get listed on BSE, NSE, or both, and anyone can buy and sell them.

For investors, IPOs offer an opportunity to invest in a company at an early stage of its public journey. If the company performs well, early investors can benefit from price appreciation. However, not all IPOs are profitable — some list below the offer price, so it is important to research before applying.

Prerequisites for Applying to an IPO

Before you can apply, make sure you have:

• A Demat account with any SEBI-registered broker.
• A bank account linked to your Demat account.
• A UPI ID — This is the most common and easiest method for retail investors to apply for IPOs in India. Your UPI ID is linked to your bank account through apps like Google Pay, PhonePe, Paytm, or your bank’s own UPI app.
• PAN card — Already linked to your Demat account.

Step-by-Step Process to Apply for an IPO

Step 1: Find an Open IPO

Check your broker’s app or website for currently open IPOs. You can also visit the NSE or BSE website for a list of upcoming and open IPOs. Financial news sites and apps also list IPO schedules with opening and closing dates.

Step 2: Read the IPO Details

Before applying, review these important details:

• Price band: The range within which you can bid. For example, Rs 400-420 per share.
• Lot size: IPO shares are allotted in lots, not individual shares. A lot might be 35 shares. You must apply for at least 1 lot.
• Issue dates: The opening and closing dates of the IPO.
• Company details: Read about the company’s business, financials, and growth prospects in the Red Herring Prospectus (RHP).

Step 3: Apply Through Your Broker’s Platform

Log in to your broker’s app. Navigate to the IPO section — it is usually under “IPO” or “New Issues.” Select the IPO you want to apply for and click “Apply” or “Bid.”

Step 4: Fill In the Bid Details

Enter the following:

• Number of lots: Choose how many lots you want to apply for. As a retail investor, you can apply for up to Rs 2 lakh worth of shares.
• Bid price: You can bid at the cut-off price (recommended for retail investors) or specify a price within the price band.
• UPI ID: Enter your UPI ID for payment.

Step 5: Approve the Payment Mandate on UPI

After submitting your application, you will receive a payment mandate request on your UPI app. Open the UPI app and approve the mandate within the deadline (usually 24-48 hours). This does not debit money immediately — it only blocks the required amount in your bank account until the allotment is decided.

Important: If you do not approve the UPI mandate, your IPO application will be rejected.

Step 6: Wait for Allotment

After the IPO closes, the company and registrar process all applications. If the IPO is oversubscribed (more applications than available shares), allotment is done through a computerized lottery. The allotment date is usually 5-7 days after the IPO closes.

Step 7: Check Allotment Status

You can check your allotment status on the registrar’s website (e.g., Link Intime or KFintech) by entering your PAN number or application number. If you are allotted shares, they will appear in your Demat account on the listing day.

Step 8: Listing Day

On the listing day, the company’s shares start trading on the stock exchange. You can either hold the shares for the long term or sell them on listing day if you want to book listing gains.

Tips for IPO Investors

• Always bid at the cut-off price as a retail investor. This maximizes your chance of allotment.
• Apply on the last day if you want to see the subscription numbers before deciding.
• Do not invest borrowed money in IPOs. Listing gains are not guaranteed.
• Read the RHP to understand the company’s financial health and business risks.
• Check the grey market premium (GMP) for a rough idea of expected listing gains, but do not rely on it entirely.

The Bottom Line

Applying for an IPO in India is a simple, digital process that takes just a few minutes. With a Demat account and a UPI ID, you can participate in any IPO from your smartphone. Just remember to research the company, apply at cut-off price, and approve the UPI mandate promptly. Happy investing.