How to apply for IPO?

How to Apply for an IPO in India

Applying for an IPO in India is a straightforward process that requires a demat account, a bank account, and a UPI ID or net banking facility. The entire process can be completed digitally within minutes through your broker's app or through your bank. Here is a step-by-step guide for retail investors.

Prerequisites for Applying to an IPO

• A demat account with any SEBI-registered depository participant (NSDL or CDSL).
• A trading account (optional for IPO application but useful for secondary market trading after listing).
• A bank account with UPI-enabled payment (for ASBA applications).
• PAN card linked to the demat account.

Step-by-Step IPO Application via Broker App

1. Open your broker's app (Zerodha, Groww, Angel One, Upstox, etc.).
2. Navigate to the IPO section in the app.
3. Select the IPO you wish to apply for.
4. Choose the number of lots (minimum one lot; lot size varies per IPO).
5. Select bid price: retail investors can bid at any price within the band or choose "cut-off price" to be allotted at whatever price is finalised.
6. Enter your UPI ID.
7. Submit the application. A payment mandate request will be sent to your UPI app.
8. Approve the mandate in your UPI app (Gpay, PhonePe, BHIM, etc.). The amount is blocked, not debited, until allotment.

Applying via Net Banking (ASBA)

You can also apply through your bank's net banking portal under the "IPO/ASBA" section. This does not require a broker account. Your bank blocks the application amount under ASBA (Application Supported by Blocked Amount); the amount is debited only if allotted. If not allotted, it is released immediately.

Important Rules for Retail Investors

• Maximum application limit for retail investors is Rs 2,00,000 per IPO.
• You can apply for multiple lots but cannot exceed Rs 2,00,000 total application value.
• Multiple applications from the same PAN are rejected.
• You can apply from multiple family members' demat accounts, each linked to a different PAN.

What Happens After Applying?

After the IPO subscription period closes, allotment is done on a computerised lottery basis for retail investors if the issue is oversubscribed. Allotment is confirmed within six business days of IPO close. Shares are credited to your demat account, and unallotted amounts are unblocked.

Key Takeaway

Applying for an IPO in India is quick and digital; the entire process takes under five minutes via a broker app or bank portal. Always apply at the cut-off price to maximise allotment chances and ensure your UPI mandate is approved before the deadline. Use the Lemonn app to research upcoming IPOs and make informed applications.