How to Apply for an IPO

The actual act of applying for an IPO is short. You open an app, pick the issue, enter a number of lots, tick cut-off, submit, and then approve a payment request on your phone. What trips up first-time applicants is almost never the form itself. It is the plumbing behind it: an account that was never linked correctly, a UPI handle the exchange does not recognise, a mandate that expired unapproved overnight, or a second application submitted on the same PAN by a well-meaning relative. This guide walks through the whole sequence in the order you will actually meet it.

What has to be in place before the window opens

• A demat account with a depository participant, since allotted shares can only be credited in electronic form.
• A PAN that is valid, active and correctly recorded against that demat account, because the registrar matches applications by PAN.
• Completed KYC with the depository participant, including any periodic re-verification your DP has asked for.
• A bank account in your own name with sufficient balance, and either net banking on that account or a UPI ID linked to it.
• A UPI handle from a bank or app that appears on the current certified list for IPO applications, which is published and updated by NPCI and the exchanges.

A trading account is not strictly required if you apply through your bank's net banking, because you are not placing a market order. It is required if you want to apply through a broker's app, and in practice most people already have one. What is genuinely non-negotiable is the demat account, the PAN linkage, and a bank account that belongs to you. Third-party applications, where someone else's money funds an application in your name, are not permitted and get rejected.

Two routes to the same place

Route one: your broker's app, with a UPI mandate

This is the route most retail applicants use. You select the open issue in your broker's app, enter the number of lots, the bid price and your UPI ID, and submit. The broker forwards the bid to the exchange platform. Your bank then sends a mandate request to the UPI app attached to that ID, and you approve it there. Approval does not transfer money; it places a hold on the amount in your account, which stays visible but unusable until the issue is settled.

Route two: your bank's net banking, using ASBA

Most banks carry an IPO or ASBA section inside net banking. You choose the issue, enter your demat details, the quantity and the price, and confirm. The bank blocks the amount directly in your account with no separate mandate to approve, because you are already authenticated inside your own bank. This route avoids the single most common point of failure in the UPI process, and it also handles application values above the ceiling that applies to UPI mandates, which UPI cannot carry.

Both routes end in the same place: a blocked amount in your bank account and a bid sitting in the exchange's book. Neither route gives you any advantage in allotment. The choice is purely operational, and applicants often keep both available so that a failure in one can be worked around while the window is still open. Dedicated articles in this pack cover ASBA and the UPI process in more depth.

The decisions the form asks you to make

Which category you are applying under

Most individual applicants fall into the retail individual investor category, which applies up to an application value ceiling fixed by regulation. Cross that ceiling and the same application is treated as a non-institutional bid, which follows a different allocation method: not less than the minimum application size for that category is allotted to each successful applicant, subject to availability, and only the balance is distributed proportionately. The threshold has been revised over the years and the non-institutional category itself has been subdivided, so confirm the current numbers on the SEBI or exchange website rather than trusting a figure quoted in an old post. Employees and shareholders of a listed parent may have separate reserved portions listed in the prospectus.

How many lots, not how many shares

You cannot bid for an arbitrary number of shares. The company fixes a lot, and every bid must be for one lot or a whole multiple of it. The lot is calculated so that the value of a single lot at the upper end of the price band falls inside a minimum application value range prescribed by regulation, which is why lot sizes vary from a few dozen shares to a few hundred depending on the price band. SME issues use a much larger minimum, which is one of the main reasons they are less accessible to small applicants.

Bidding at a price, or bidding at cut-off

In a book-built issue you may enter any price inside the band, or tick the cut-off box. Cut-off means you accept whatever final issue price is discovered. Because you have accepted the maximum possible outcome, money is blocked at the upper end of the band, and anything not required is released once the price is fixed.

The mechanical reason most retail applicants choose cut-off is that a specific bid below the discovered issue price is simply not eligible for allotment. If you bid at ₹184 in a ₹180 to ₹190 band and the price is set at ₹190, your bid falls out of the book entirely and your money is unblocked without any shares. Bidding at a specific price only makes sense when you have a genuine view that you would rather not own the shares above that level, and you accept the risk of receiving nothing. The cut-off option is available to retail individual bidders, and also to eligible employees and retail individual shareholders bidding under an employee or shareholder reservation portion where the issue has one. Qualified institutional buyers and non-institutional bidders cannot bid at cut-off, and such bids are liable to be rejected.

One PAN, one application per category

The registrar deduplicates by PAN. If the same PAN appears on two applications in the same category, both are liable to be rejected, not just the second one. This catches families where two people apply for each other out of enthusiasm. Separate family members with their own PAN, their own demat account and their own bank account can each apply legitimately, and a Hindu Undivided Family with its own PAN is treated as a separate applicant. What is not permitted is one person funding several applications or applying more than once on a single PAN.

The mandate: the step first-timers miss

On the UPI route, submitting the form is not the end. The bid is only complete once you approve the mandate in your UPI app, and until you do, the application sits incomplete regardless of what the broker's confirmation screen says.

1. Submit the bid in the broker app and note the application number it generates.
2. Open the UPI app tied to the ID you entered and go to the pending requests or mandates section, since the notification is easy to miss.
3. Check that the merchant name, the amount and the application reference match the bid you placed before approving anything.
4. Approve the mandate with your UPI PIN, which places a hold rather than making a payment.
5. Confirm in your bank account that the amount now shows as blocked or on hold and that the usable balance has reduced accordingly.
6. If no request arrives within a reasonable time, check the UPI ID you entered, and if it was wrong, place a fresh application well before the deadline.

Mandate approval has its own deadline, which falls earlier than you might expect and is not the same as the issue closing time. Banks and brokers also stop accepting fresh applications before the exchange's own cut-off on the closing day. Both timings are published for each issue, and both are worth checking rather than assuming. An unapproved mandate means no valid bid, and no valid bid means no allotment even if the issue was undersubscribed.

Working through one application in numbers

The following figures are invented to show the arithmetic, not taken from any real issue. Suppose an issue has a price band of ₹180 to ₹190 and a lot of 78 shares. One lot at the cap is 78 multiplied by ₹190, or ₹14,820. Bidding for one lot at cut-off blocks ₹14,820. Bidding for three lots blocks ₹44,460, and you must hold that full amount in the account, not merely the value of one lot.

Now suppose the issue price is discovered at ₹186. Your one-lot application, if allotted, is debited 78 multiplied by ₹186, or ₹14,508, and ₹312 is released back to you. If you receive no allotment, the entire ₹14,820 is released. If you had applied for three lots in an oversubscribed retail category, the lottery treats your application as a single entry for one lot, so a successful outcome would typically mean one lot allotted at ₹14,508 with the remaining ₹29,952 released. That last point is the one most worth remembering: extra lots do not improve your odds in an oversubscribed retail category.

Changing your mind while the window is open

A bid is not irreversible the moment it is placed. Retail individual bidders may revise the quantity or the price, or withdraw the application altogether, up to the issue closing day, within the timings the issue specifies. A revision that increases the value triggers an additional block; one that reduces it releases the difference. Withdrawal releases the whole blocked amount, though the release may take a short while to reflect in your usable balance.

The other categories are treated differently on purpose. Qualified institutional buyers and non-institutional bidders generally cannot withdraw or lower their bids once placed. The reasoning is straightforward: subscription figures published during the window influence how everyone else behaves, so large bidders are not allowed to inflate the book and then pull out at the end. The exact windows and restrictions for each category are set out in the prospectus for that issue.

What happens to your money after you apply

The blocked amount stays in your account earning whatever interest that account pays. It is not transferred anywhere. After the window closes, the registrar finalises the basis of allotment, and only then is the exact allotted value debited. Everything else is unblocked. Unsuccessful applicants do not receive a refund in the old sense because nothing ever left the account. If a block persists well past the stated timelines, that is a bank or sponsor-bank issue to raise with your bank first and the registrar second, and this pack has a separate article on mandate and unblocking failures.

SME issues follow the same steps at a different scale

The application mechanics for an SME issue are essentially identical: same demat requirement, same PAN rule, same choice between UPI and net banking. What differs is the size of the commitment. SME lots are built around a much larger minimum application value, so a single lot can cost several times what a mainboard lot costs, and the categories are structured differently. Trading after listing is also far thinner, and the market lot for buying and selling on the exchange remains large rather than reverting to one share. A separate article in this pack sets out the full comparison, and it is worth reading before treating an SME application as simply a smaller version of the same thing.

After the window closes

Once bidding ends, there is nothing left for you to do except wait for the registrar to finalise the basis of allotment. When it is published, you can check your status on the registrar's website using your PAN, your application number or your demat identifiers, and the exchanges also host a status page. Your bank statement usually tells you the answer before either site does, because the debit or the release of the block appears there. Allotted shares then reach your demat account before the listing date, and only at that point do you own anything tradeable.

Two habits save trouble later. Keep the application number and a screenshot of the confirmation until the money is either debited or fully released, because that is the evidence you will need if something has to be escalated. And treat any message offering guaranteed allotment, a share of an institutional quota, or shares before listing as a fraud attempt, because the allotment process is run by the registrar under exchange supervision and nobody can privately arrange an outcome inside it.

Why applications get rejected

• The mandate was never approved, or was approved after the cut-off time.
• Insufficient balance in the account when the bank attempted the block.
• The same PAN was used for more than one application in the same category.
• A mismatch between the name or PAN on the demat account and the bank account used.
• An incorrect, inactive or non-certified UPI handle, so the request never reached the applicant.
• A demat account that is dormant, frozen, or has failed a KYC re-verification.
• A specific bid entered below the finally discovered issue price, which is not a rejection but produces the same result of no allotment.
• An application value that crosses a category ceiling without the applicant realising the category has changed.

A checklist for the minutes before you submit

1. Confirm the issue is genuinely open and note both the closing time for applications and the separate mandate deadline.
2. Verify the lot size and price band from the prospectus or the exchange page rather than from a message forwarded to you.
3. Decide how much you can afford to have blocked for several days without disrupting other payments or EMIs.
4. Check that your demat account is active and that the PAN and name match your bank account exactly.
5. Apply well before the final hours, since load on the closing day causes failures that leave no time to retry.
6. Approve the mandate immediately and confirm the hold is visible in your bank balance.
7. Save the application number, since you will need it to check allotment status later.

None of this is a view on whether any particular issue deserves your money. The mechanics are worth learning precisely so that they stop consuming attention, leaving you free to spend that attention on the prospectus, the objects of the issue, the financials and the price being asked. An application that executes cleanly is the easy part; deciding whether to make it at all is the part that actually matters.