You may have seen an IPO trending online and wondered how people actually apply for it?
To apply for an IPO online in India, you generally need a PAN, an active demat account, a bank account, and an eligible application route such as UPI or ASBA.
You place your bid, authorize the amount to be blocked, wait for the allotment process, and then either receive shares or have the blocked funds released.
The important point to understand is that applying for an initial public offering (IPO) is not the same as buying a listed stock. Your money is generally blocked rather than immediately transferred, and it’s debited only to the extent required if shares are allotted.
SEBI’s framework defines ASBA as an application mechanism that authorizes the blocking of application money in a bank account.
Here is the complete IPO application process for beginners.
How Does an IPO Application Work?
The simplest way to understand an initial public offering (IPO) is to follow the money and the shares separately.
The application stage runs like this: you choose an IPO, check the price band and lot size, submit your application, approve the UPI mandate or authorize ASBA, and your funds get blocked while the basis of allotment is finalized.
What happens next depends on the outcome. If shares are allotted, the required amount is debited and shares are credited to your demat account. If there’s no allotment, the funds are simply unblocked. The blocking mechanism exists specifically to prevent investors from having to transfer the full application amount away before allotment is even decided.
What Do You Need Before Applying for an IPO?
Before starting an IPO application online, make sure you have the following in place:
- PAN. Your application details must match your PAN records.
- Demat account. This is where allotted shares are credited.
- Bank account. The account must support the chosen payment or ASBA mechanism.
- UPI ID or ASBA access. You can use an eligible UPI route through an intermediary or apply through your bank using ASBA.
- Sufficient available balance. The required application amount must be available for blocking.
For retail investors, UPI is an important part of the current public-issue process. SEBI’s framework provides for UPI-based ASBA, and current issue documents distinguish retail bids from larger non-institutional applications.
The applicable investor category and limits should always be checked in the specific IPO’s offer documents, since regulations can change.
Step 1: Find an IPO You Want to Apply For
Before opening your broker’s app, first research to understand what you’re actually buying.
An IPO’s offer documents typically provide details such as the issue opening and closing dates, the price band, the lot size, the minimum application, the fresh issue and offer-for-sale components, the use of proceeds, business risks, and financial information.
The Red Herring Prospectus (RHP) is an important source for understanding the issue and its risks.
Do not confuse popularity with investment quality. An IPO can attract enormous demand and still be unsuitable for a particular investor. Read the company’s business model, financial performance, valuation, and risk factors before applying.
Step 2: Understand the Price Band and Lot Size
Book-built IPOs generally have a price band rather than one fixed bidding price.
For example, if the price band is ₹95–₹100 per share and the lot size is 150 shares, the amount required for one lot at the upper end would be 150 × ₹100, or ₹15,000. So, before applying, it’s worth calculating the amount that could actually be blocked.
For eligible retail applications in book-built issues, investors may have the option to bid at the cut-off price.
This means agreeing to pay the final issue price determined within the applicable price band, rather than entering a specific price. Always check the individual IPO’s application terms before selecting an option.
Step 3: Choose How to Apply for the IPO
For most beginners, there are two practical routes.
| Application route | How it works | Best suited for |
|---|---|---|
| UPI through broker or intermediary | Submit bid and approve a UPI mandate | Beginners using investment apps |
| Bank ASBA | Apply through eligible bank and authorize funds to be blocked | Investors using net banking or bank channels |
SEBI’s framework treats UPI applications as part of the broader ASBA mechanism, and NSE also provides ASBA facilities for public issues.
Applying for an IPO Using UPI
The exact screen names vary by broker, but the process usually looks like this: open the IPO section of your broker’s app or website. Select the IPO, choose your investor category, enter the number of shares or lots, select the bid price or cut-off option where available. Then enter your UPI ID, submit the application, open your UPI app to approve the mandate request.
Current broker instructions follow this general structure.
Zerodha, for example, directs users to select the IPO, enter the UPI ID, quantity and price, submit the bid, and then accept the mandate in the UPI app.
Groww follows a similar process, requiring an active demat account, UPI ID, lot-size-compliant quantity, and approval of the UPI mandate.
Upstox likewise instructs investors to select the IPO, enter the lot size and price, provide the UPI details, and approve the mandate.
One rule matters more than the others here: the UPI ID should belong to the applicant. Zerodha explicitly states that a UPI ID mapped to somebody else’s bank account can lead to rejection of the application.
Step 4: Approve the UPI Mandate
Submitting the application and approving the mandate are two connected but separate steps. After you submit the bid, your bank may send a UPI mandate request. Open your UPI application and review the request carefully before approving it.
Once accepted, the required amount is blocked in the linked bank account. It’s not the same as an ordinary payment in which the entire amount permanently leaves your account immediately.
If shares are allotted, the applicable amount is debited; if there’s no allotment, the blocked amount is released.
This is one of the easiest steps to overlook, and one of the most important.
Step 5: Apply Through Bank ASBA
UPI is not the only way to apply. ASBA stands for Application Supported by Blocked Amount.
The basic bank-based process works like this: Log in to your eligible bank’s net-banking facility and open the IPO or ASBA section. Now select the relevant issue, enter your investor and demat details.
Then enter the number of shares and bid price, authorize the blocking of funds, and save the application or acknowledgement details.
Under ASBA, the money remains in the designated bank account but is blocked for the application. The amount is transferred for allotted shares after the allotment process, while unsuccessful applications have the blocked funds released.
For investors who prefer not to use UPI, this remains a practical alternative.
Step 6: What Happens After You Apply for an IPO?
Once the IPO closes, you move into the processing stage. The broad sequence runs from the IPO closing, to bids being processed, to the basis of allotment being finalized, to shares either being allotted or the application receiving no allotment, to funds being debited or unblocked accordingly, to shares being credited to demat accounts, and finally to shares beginning trading after listing.
Exact dates vary by issue, so it’s better to follow the timetable in the IPO’s offer documents rather than rely on a fixed number of days. SEBI’s current framework also emphasizes timelines for public issues and the movement or release of blocked application funds.
What Happens If You Get IPO Allotment?
If you receive shares, the amount required for those shares is debited from the blocked funds, and the allotted equity shares are credited to your demat account. Once the shares are listed and trading begins, you can hold them or sell them through your trading account, subject to market conditions and applicable trading rules.
Receiving an allotment, however, does not mean you are guaranteed a profit. The market price can rise, remain below the issue price, or fall after listing.
What Happens If You Do Not Get IPO Allotment?
This is a common concern among first-time investors. If you do not receive an allotment, the application amount is not simply lost.
The blocked funds are released according to the applicable IPO process — SEBI’s ASBA framework provides for the application money to remain blocked until allotment and then be transferred or unblocked according to the outcome.
In simple terms: no shares means no purchase, and the blocked funds are released.
How to Apply for an IPO Using Zerodha, Groww, or Upstox
Broker interfaces change regularly, so exact button names should not be treated as permanent instructions.
The underlying process remains similar across platforms: find the IPO, enter your bid, provide your UPI details, submit, and approve the mandate.
Zerodha currently uses its IPO/Bids section for applications, Groww places IPOs within its investment interface, and Upstox provides an Open IPO section.
How Much Money Do You Need to Apply for an IPO?
You normally need enough available funds to cover at least the minimum application size.
The formula is simple: IPO application amount equals the number of shares multiplied by the bid price.
For a one-lot application, the minimum amount you need is the lot size multiplied by the applicable price.
As an example, 100 shares at ₹200 each comes to ₹20,000, so you’d want approximately that amount available for blocking.
When using the cut-off option, the application amount is generally calculated using the applicable upper price for blocking purposes. Always check the issue’s specific terms before submitting the bid.
How Does IPO Allotment Work?
Applying for more shares does not automatically guarantee receiving more shares. When an IPO is heavily oversubscribed, demand may exceed the shares available to a particular investor category, and the final allocation follows the applicable basis of allotment.
As a result, an investor may receive the shares requested, fewer shares than requested, or no shares at all.
The important lesson is simple: an IPO application is a request for allotment, not a guaranteed purchase.
Common IPO Application Mistakes to Avoid
Beginners can avoid many problems by checking a few basics before submitting an application.
- Forgetting the UPI mandate. Submitting the bid alone is not enough when the application requires mandate approval.
- Using someone else’s UPI ID. The payment account should meet the applicable applicant requirements.
- Entering the wrong demat details. Incorrect information can affect the application.
- Ignoring the lot size. Your quantity generally needs to follow the issue’s specified lot structure.
- Not keeping sufficient balance. The required amount must be available for blocking.
- Assuming oversubscription guarantees listing gains. Demand is not the same as future performance.
- Ignoring the RHP. Investors should understand business and issue-specific risks before applying.
- Submitting duplicate applications incorrectly. Multiple applications involving the same PAN can create rejection issues under applicable rules, so broker guidance should be checked before submitting more than one application.
Should You Apply for Every IPO?
No. An IPO can receive significant media attention without being the right investment for every investor.
Before applying, it’s worth looking closely at the business model — how the company actually makes money — along with its financial performance, debt levels, valuation relative to listed peers, planned use of funds, and the risks that could affect future growth.
A strong application process should end with a better investment decision, not simply a successfully submitted form.
IPO Application Checklist for Beginners
Before applying, check the following:
- PAN details are correct
- Demat account is active
- Bank account is linked to the chosen application method
- UPI ID belongs to the applicant, where UPI is used
- IPO price band is understood
- Lot size is checked
- Required funds are available
- RHP and key risks have been reviewed
- Application quantity is correct
- UPI mandate has been approved, where applicable
- Application status is tracked
- Allotment result is checked
Final Word
Applying for an IPO online is easier once the process is separated into a few clear stages. Choose the IPO. Check the price and lot size. Submit the bid. Approve the UPI mandate or use ASBA. Wait for allotment. Then follow what happens to your funds and shares.
The technology may change. Broker interfaces may change. Regulatory limits may change. But the fundamental principle stays the same: an IPO application is a bid for shares, with the application money blocked under the ASBA framework until the allotment process determines what happens next.
For any specific IPO, always verify the latest price band, lot size, investor category, application limits, dates, and instructions in the issue’s official documents before applying.
Frequently Asked Questions
Can I apply for an IPO without a demat account?
No. You need a demat account to receive shares if they are allotted.
Can I apply for an IPO using UPI?
Yes. Eligible investors can use the UPI mechanism for public-issue applications, subject to the applicable rules and limits.
Is money immediately deducted after applying for an IPO?
Generally, the application amount is blocked first. The required amount is debited if shares are allotted; otherwise, the blocked funds are released.
What happens if IPO shares are not allotted?
The shares are not credited, and the blocked application amount is released according to the applicable process.
Can beginners apply for an IPO?
Yes. Beginners can apply if they meet the eligibility and account requirements for the relevant investor category. However, eligibility does not mean the IPO is necessarily a suitable investment.
