Complete Guide: How to Apply for an IPO in India (2025)

Applying for an Initial Public Offering (IPO) in India has become significantly easier with digital platforms and UPI-based applications. This comprehensive guide will walk you through the entire IPO application process, from choosing the right IPO to checking your allotment status.

Understanding the IPO Application Process

When a company goes public, it offers shares to retail investors like you through an IPO. The application process involves bidding for shares within a specified price band during the subscription period, which typically lasts 3 working days.

Key Terms You Must Know

Before applying, familiarize yourself with these important terms: Lot Size: The minimum number of shares you can apply for. For example, if the lot size is 21 shares and the price is ₹500, your minimum investment would be ₹10,500. Price Band: The minimum and maximum price range set by the company. Example: ₹674-₹708 per share. Cut-off Price: When you select "cut-off," you're agreeing to pay whatever final price is determined by the company within the price band. For retail investors, bidding at cut-off is recommended to avoid rejection. Retail Category: Individual investors who invest up to ₹2,00,000 in an IPO. This category gets a reserved quota of typically 35% of the total issue size.

Method 1: UPI-Based Application (Recommended)

This is the easiest and most popular method for retail investors in 2025.

Step 1: Open Your Trading App

Login to your broker's mobile app. Popular options include: - Zerodha Kite - Groww - Upstox - Angel One - 5Paisa - ICICI Direct Navigate to the "IPO" section, usually found in the main menu.

Step 2: Select the IPO

You'll see a list of open IPOs. Click on the one you want to apply for. Read the company details, price band, and subscription status before proceeding.

Step 3: Enter Application Details

Number of Lots: Choose how many lots you want to apply for (1, 2, 3, etc.). Remember, as a retail investor, your total application amount cannot exceed ₹2,00,000. Bid Price: You can either: - Enter a specific price within the price band - Select "Cut-off" (recommended for retail investors) UPI ID: Enter your UPI ID (e.g., yourname@paytm, yourname@ybl). Make sure this UPI ID is linked to your bank account that has sufficient funds.

Step 4: Submit Your Application

Review all details carefully. Once satisfied, click "Apply" or "Submit." Your application is now registered with the stock exchange.

Step 5: Approve UPI Mandate

Within a few minutes, you'll receive a UPI mandate request on your UPI app (Google Pay, PhonePe, Paytm, etc.). Important: Open your UPI app and approve the mandate. The funds will be blocked in your account but NOT debited. If you're not allotted shares, the amount will be unblocked automatically. You must approve the mandate before 5 PM on the day you apply, or before the IPO subscription closes.

Method 2: ASBA (Application Supported by Blocked Amount)

If you prefer using net banking instead of UPI: 1. Login to your bank's net banking portal 2. Navigate to "Investments" or "IPO" section 3. Select the IPO you want to apply for 4. Enter your Demat account number, PAN, and bid details 5. Specify the number of lots and price 6. Submit the application The required amount will be blocked in your bank account until allotment.

Banks Supporting ASBA:

- HDFC Bank - ICICI Bank - SBI - Axis Bank - Kotak Mahindra Bank - And most other major banks

Method 3: Through Broker Website

Similar to the mobile app method, but done via your broker's desktop website. This is useful if you prefer working on a computer.

Important Calculation: How Much to Invest

Before applying, calculate your total investment: Formula: Total Investment = Lot Size × Number of Lots × Price per Share Example: - Lot Size: 21 shares - Number of Lots: 2 - Price (at cut-off): ₹708 - Total Investment: 21 × 2 × 708 = ₹29,736 Retail Limit Check: Your total application must not exceed ₹2,00,000. To find maximum lots you can apply for: Maximum Lots = ₹2,00,000 ÷ (Lot Size × Price per Share)

Best Practices for IPO Applications

1. Apply at Cut-Off Price

For retail investors, it's almost always recommended to bid at the cut-off price. This ensures your application won't be rejected due to price mismatch, as you're willing to pay the final price decided by the company.

2. Apply Early in the Subscription Period

While you can apply anytime during the 3-day subscription window, applying on Day 1 or Day 2 gives you: - Peace of mind - Time to resolve any UPI mandate issues - Ability to track subscription numbers

3. Ensure Sufficient Funds

Have at least 5-10% more than the required amount in your bank account. Some banks may block slightly more than the exact amount due to rounding or charges.

4. Use Only One Demat Account

You can only apply once per PAN card. Applying from multiple Demat accounts with the same PAN will result in rejection of ALL applications.

5. Check Subscription Numbers

Monitor the subscription status during the bidding period: - QIB (Institutional) subscription - NII/HNI (High Net Worth) subscription - Retail subscription High subscription numbers (especially from QIB) indicate strong demand and potential for good listing gains.

After Applying: What Happens Next?

Day 0-3: Subscription Period

The IPO is open for applications. You can modify or cancel your application during this period (though most platforms don't allow modifications easily).

Day 4-5: Basis of Allotment

The Registrar finalizes who gets how many shares. You can check your allotment status on the registrar's website (Link Intime, KFin Technologies, etc.).

Day 6: Refund Initiation

If you're not allotted any shares, or allotted fewer lots than applied, the blocked amount (or excess amount) is unblocked/refunded to your bank account.

Day 7: Credit to Demat

If allotted, shares are credited to your Demat account.

Day 8-10: Listing Day

The IPO gets listed on stock exchanges (NSE, BSE). You can sell your shares or hold them for long-term investment.

Common Mistakes to Avoid

❌ Mistake 1: Not Approving UPI Mandate Many investors forget to approve the UPI mandate, leading to application rejection. ❌ Mistake 2: Applying After Cut-off Time Each day has a 5 PM cut-off. Applications after this are considered for the next day. ❌ Mistake 3: Wrong UPI ID Double-check your UPI ID. A typo means the mandate won't reach you. ❌ Mistake 4: Multiple Applications Applying from family members' accounts using the same PAN is illegal and leads to rejection. ❌ Mistake 5: Insufficient Funds Ensure your bank account has the required amount plus some buffer throughout the subscription period. ❌ Mistake 6: Ignoring Cut-off Price For retail investors, always bid at cut-off unless you have a specific strategy.

Which Broker is Best for IPO Applications?

Here's a quick comparison of popular brokers: Zerodha: - ✅ No account opening charges - ✅ Easy UPI integration - ✅ Clean interface - ❌ No call-and-trade support Groww: - ✅ Completely free - ✅ Very beginner-friendly - ✅ Quick KYC process - ✅ Good customer support Upstox: - ✅ Low brokerage - ✅ Fast app - ✅ Good for active traders ICICI Direct: - ✅ Established brand - ✅ Relationship with ICICI Bank helps - ❌ Higher charges For IPO applications specifically, Groww and Zerodha are the most popular choices due to their ease of use and zero account opening fees.

How to Check Allotment Status

After the IPO closes, wait for the basis of allotment date (usually T+4 or T+5 days). Then: 1. Visit the registrar's website (mentioned in the IPO prospectus) 2. Enter your PAN number or application number 3. Check your allotment status Common registrars: - Link Intime India: linkintime.co.in - KFin Technologies: kfintech.com - Cameo Corporate Services You can also check via your broker's app, which usually shows allotment status automatically.

Understanding Allotment Probability

If an IPO is oversubscribed in the retail category, allotment is done through: Lottery System: When oversubscribed more than 2x, allotment is random (lottery-based). Proportionate Allotment: When moderately oversubscribed, shares are distributed proportionately. Example: If retail category is subscribed 5 times, you have roughly a 1 in 5 (20%) chance of getting allotment if you applied for 1 lot.

Final Tips for Successful IPO Investing

✅ Research the company thoroughly before applying ✅ Check fundamentals: revenue growth, profitability, debt levels ✅ Review the Grey Market Premium (GMP) for market sentiment ✅ Read expert reviews and analyst reports ✅ Check the company's peer valuations ✅ Don't invest more than 5-10% of your portfolio in a single IPO ✅ Use our IPO Calendar to track upcoming IPOs ✅ Set up price alerts for GMP and subscription updates

Conclusion

Applying for IPOs in India is now extremely simple thanks to UPI-based applications. Follow this guide, avoid common mistakes, and you'll successfully submit your IPO application. Remember to: 1. Choose a good broker with easy IPO application process 2. Apply early and at cut-off price 3. Approve UPI mandate immediately 4. Keep sufficient funds in your account 5. Check allotment status on the designated date Happy IPO investing! For more IPO guides and live GMP updates, visit IPO Guruji.