How to Apply for an IPO in India: A Step-by-Step Guide for Beginners
Applying for an IPO in India today takes minutes, not hours. You no longer need to fill out paper forms or stand in a bank queue. All you need is a demat account, a PAN card, and a UPI-linked bank account. This guide walks you through the entire process, from checking your eligibility to tracking your allotment status.
Quick Answer: How to Apply for an IPO Online
- Open a demat and trading account with a SEBI-registered broker.
- Log in to your broker’s app during the IPO’s open dates.
- Select the IPO, choose your lot size, and bid at the cut-off price.
- Enter your UPI ID and submit the application.
- Approve the UPI mandate in your payment app (Google Pay, PhonePe, BHIM) before 5 PM on the closing day.
- Check your allotment status on T+1 and wait for listing on T+3.
That is the process in a nutshell. The sections below explain each step in detail, along with the ASBA net banking route for those who prefer it.
What Does It Mean to Apply for an IPO?
An IPO, or Initial Public Offering, is how a private company sells shares to the public for the first time. When you apply, you place a bid to buy a fixed number of shares before the company lists on the exchange. If demand exceeds supply, allotment is decided through a computerised lottery, so applying does not guarantee you will get shares.
Before You Apply: What You Need
| Requirement | Why You Need It |
| PAN card | Mandatory for every financial transaction in India; only one application is allowed per PAN |
| Demat account | Holds the shares if you are allotted any; must be with a SEBI-registered Depository Participant |
| Trading account | Lets you place the IPO bid through your broker |
| Bank account with UPI or net banking | Used to block the application amount until allotment |
| Sufficient bank balance | The full bid amount is blocked, not deducted, until the allotment is finalised |
One detail that trips up many first-timers: the name on your demat account must exactly match the name on your bank or UPI account, or the application can get rejected. Third-party UPI handles are not allowed, so the UPI ID you use must be linked to your own bank account and PAN.
Understanding IPO Investor Categories
Before you apply, you need to know which category you fall under, since this affects your allocation and bidding rules.
| Category | Who It’s For | Investment Limit | Reserved Quota (Mainboard) |
| Retail Individual Investor (RII) | Regular individual investors | Up to Rs 2 lakh | At least 35% of the offer |
| Non-Institutional Investor (NII/HNI) | High net-worth individuals, HUFs, corporates | Above Rs 2 lakh | At least 15% of the offer |
| Qualified Institutional Buyer (QIB) | Mutual funds, banks, insurers, FPIs | Institutional only | Not more than 50% of the offer |
Most beginners apply as retail investors. You can bid at the cut-off price in this category, something NIIs are not permitted to do. If your bid amount crosses Rs 2 lakh, you automatically move into the NII category, where you must bid at a specific price within the band instead.
Note: SEBI has floated a proposal to trim the retail quota to as low as 25% for IPOs above Rs 5,000 crore, offset by a higher QIB and mutual fund share. This is still a consultation proposal, so check the allocation structure in the specific IPO’s Red Herring Prospectus (RHP) before applying.
How to Apply for an IPO Online Using UPI (Most Common Method)
This is the easiest and most widely used route for retail investors, and it works entirely through your broker’s app.
- Open your broker’s app (Lemonn or similar) and go to the IPO section.
- Select the IPO you want to apply for. You will see the price band, lot size, and open and close dates.
- Choose the number of lots. A lot is the minimum number of shares you must bid for; you can apply for multiples of one lot up to the retail ceiling of Rs 2 lakh.
- Select “Cut-off price.” This means you agree to pay whatever price the company finally sets within the band, and it is the standard practice for retail investors since it maximises allotment chances.
- Enter your UPI ID (for example, yourname@sbi or yourname@axisbank) and submit the application.
- Approve the UPI mandate. A notification will land in your UPI app within a few minutes. Open it, verify the IPO name and blocked amount, and enter your UPI PIN to authorise the block.
Once approved, the money is frozen in your bank account, not deducted. You keep earning interest on the blocked funds, and the amount is released automatically if you are not allotted shares.
The UPI limit for IPO applications is Rs 5 lakh per transaction, available only to retail investors. If your application exceeds this, use the ASBA net banking route instead.
Read More: Unlock IPO Mandate On UPI Apps: Expert Guide
How to Apply for an IPO Through ASBA (Net Banking)
ASBA stands for Application Supported by Blocked Amount. It works on the same blocking principle as UPI but is processed directly through your bank. This route suits investors applying above Rs 2 lakh, or anyone who prefers not to use UPI.
- Log in to your bank’s net banking portal (SBI, HDFC, ICICI, Axis, and most major banks support this).
- Look for the “Investments,” “e-Services,” or “ASBA/IPO” section.
- Select the active IPO from the list.
- Enter your demat account details (DP ID and Client ID), choose your lot size, and bid at the cut-off price.
- Submit the form. The bank blocks the funds directly from your account; no separate mandate approval is needed.
Offline ASBA applications are still accepted at designated bank branches via a physical form, though this is rarely used now, given how much faster the digital routes are.
IPO Application Timeline: What Happens After You Apply
| Day | What Happens |
| IPO Open (Day 1-3) | You submit your bid and approve the UPI mandate or ASBA block |
| Closing Day | Applications must be submitted and UPI mandates approved before 5 PM |
| T+1 | Basis of allotment is finalised; you can check your allotment status |
| T+2 | Refunds are processed and unblocked funds are released for those not allotted shares; shares are credited to the demat accounts of successful applicants |
| T+3 | Shares are listed and begin trading on NSE and BSE |
This T+3 cycle from IPO closing to listing is now the standard timeline for mainboard IPOs in India, making the entire process considerably faster than it was a few years ago.
How Allotment Works If the IPO Is Oversubscribed
If the retail category receives more applications than shares available, a computerised lottery decides allotment. The system tries to give one minimum lot to as many unique applicants as possible, rather than favouring larger bids. So applying for more than one lot in the retail category does not improve your odds; each valid application gets one entry into the draw.
If you are not allotted shares, the blocked amount is released automatically, usually within 24 to 48 hours of allotment being finalised. If a company fails to unblock funds within the prescribed window, it must pay interest on the delayed amount.
Read More: How IPO Allotment Works and How to Increase Your Chances
How to Check Your IPO Allotment Status
You can check whether you have been allotted shares in two ways:
- Through your broker’s app: Go to the IPO section and check the order or application status.
- Through the registrar’s website or the NSE/BSE portal: Enter your PAN, application number, or demat account number on the IPO allotment status page.
Read More: How to Check IPO Allotment Status in India
Common Mistakes That Get IPO Applications Rejected
- Mismatched names: PAN on your demat and bank/UPI account must match exactly.
- Missing the mandate deadline: UPI mandates not approved by 5 PM on closing day are auto-rejected and cannot be approved late.
- Multiple applications on one PAN: Only one application per PAN per IPO is allowed, even across brokers. Duplicate applications get rejected.
- Using a third-party UPI ID: The UPI handle must belong to the applicant, not a family member.
- Applying at the last minute: UPI servers often slow down near the 5 PM deadline. Apply and approve the mandate well in advance.
- Bidding below cut-off: If your bid falls below the final price, your application can be rejected. Retail investors should select a cut-off price.
Key Takeaways
- Applying is now fully digital: UPI is the fastest route, while ASBA net banking suits larger applications.
- Funds are only blocked, not debited, until allotment, and you earn interest on the blocked amount throughout.
- Select a cut-off price as a retail investor, approve your UPI mandate well before 5 PM, and stick to one application per PAN.
- Allotment in an oversubscribed retail category is decided by lottery, so extra lots don’t improve your chances.
- Read the Red Herring Prospectus before applying. At the end of the day, an IPO application is an investment decision.
Frequently Asked Questions (FAQs)
Can I apply for an IPO without a demat account?
No. A demat account is mandatory, since allotted shares are credited directly to it.
Is there a fee for applying to an IPO through UPI or ASBA?
No. Applying through UPI or ASBA is a free service offered by brokers and banks.
Can I cancel or modify my IPO application after submitting it?
Yes, you can usually revise or cancel your bid anytime before the IPO closes. Once the window closes, no changes are allowed.
What happens if I don’t approve the UPI mandate in time?
Your application is treated as invalid. Funds are never blocked, and the bid is not sent to the exchange for allotment.
Can I apply for the same IPO from two different broker accounts?
No. Only one application per PAN per IPO is allowed. Duplicate applications, even from different brokers, are rejected.
What is the UPI limit for IPO applications?
Rs 5 lakh per transaction. Applications above this amount must go through the ASBA net banking route.
Disclaimer
The stocks mentioned in this article are not recommendations. Please conduct your own research and due diligence before investing. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. Lemonn (Formerly known as NU Investors Technologies Pvt. Ltd) do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.
