How to Apply for an IPO in India — Complete Step-by-Step Guide

Applying for an IPO in India used to involve physical forms and cheques. Today, it takes less than two minutes on a phone.

But while the process is faster, it is also completely unforgiving of small mistakes. The vast majority of failed IPO applications do not fail in the allotment lottery — they fail because a PAN was typed wrong, a UPI mandate expired, or a bid was placed below the cut-off price.

This guide walks through the exact steps to apply for an IPO in India, the rules that actually matter, and how to avoid the common errors that get applications rejected.

Prerequisites: What you actually need

Before an issue even opens, you need three things linked to the same person. If any of these are missing or mismatched, the application will not survive the registrar's validation:

1. A Demat account: This holds your shares electronically. You can open one with a discount broker (like Zerodha, Groww, or Upstox) or a full-service broker.
2. A PAN (Permanent Account Number): Mandatory for all stock market participation.
3. A bank account and UPI ID: The bank account must be linked to the UPI ID you use for the application.

Crucial rule: The name on the Demat account, the PAN, and the bank account must match. You cannot use your Demat account to apply using your spouse's UPI ID and bank account. That is an instant rejection.

The Two Ways to Apply: UPI vs ASBA

There are two main routes to apply for an IPO as a retail investor. Both use the ASBA (Applications Supported by Blocked Amount) system, which means the application money stays in your bank account, earning interest, until shares are actually allotted to you. It is only debited if you win the lottery.

Method 1: The UPI Route (Via Broker App)

This is how 90% of retail investors apply today.

1. You place the bid on your broker's app.
2. The broker sends the bid to the exchange.
3. The exchange triggers a UPI mandate request to your UPI app (GPay, PhonePe, BHIM).
4. You open the UPI app, enter your PIN, and approve the mandate to block the funds.

Limit: Up to ₹5 lakh per application.

Method 2: The Net Banking Route (ASBA)

1. You log into your bank's net banking portal.
2. Navigate to the IPO/ASBA section.
3. Select the IPO, enter your Demat account number (DP ID + Client ID), and place the bid.
4. The bank blocks the funds directly — no UPI mandate required.

Why use this? It skips the UPI mandate step entirely, which is the most common point of technical failure on the last day of an issue. It also allows applications above ₹5 lakh (for HNIs).

Step-by-Step: The UPI Application Process

Assuming you are using a broker app (the UPI route), here is the exact sequence:

Step 1: Find the IPO

Log into your broker app during the issue's open window (typically 10:00 AM to 5:00 PM over three working days). Navigate to the 'IPO' section and select the issue you want to apply for.

Step 2: Enter your bid

You will be asked for three things:

• Quantity: Enter the number of shares. This must be in multiples of the lot size. If the lot size is 35, you must bid for 35, 70, 105, etc.
• Price: You will see a price band (e.g., ₹290 - ₹300).
• Investor Category: Select 'Retail' (if applying up to ₹2 lakh).

The Cut-Off Price Rule: As a retail investor, you should almost always check the box that says "Apply at Cut-Off Price". This means you agree to buy the shares at whatever final price is decided within the band (usually the upper band in any decent issue). If you bid at ₹290 and the final price is ₹300, your application is thrown out. Bidding at cut-off ensures your application remains valid regardless of where the price settles.

Step 3: Enter your UPI ID

Provide the UPI ID linked to your bank account. Submit the application.

Step 4: Approve the UPI Mandate (The Most Important Step)

Your broker has recorded the bid, but it is not valid yet. Within a few hours (sometimes minutes, sometimes half a day), you will receive a notification on your UPI app for a "mandate request" or "autopay request".

You must open the UPI app, review the mandate, and enter your UPI PIN to approve it. This blocks the funds in your account. If you do not approve the mandate before the deadline (usually 5:00 PM on the closing day), your application is dead.

Application Categories and Limits

Before you type in a quantity, you need to know which category you are aiming for. Crossing a threshold changes how your application is treated in the allotment draw.

How Many Lots Should You Apply For?

If an IPO is heavily oversubscribed in the retail category (which almost all good ones are), applying for multiple lots is a waste of capital.

SEBI's rules dictate that in an oversubscribed retail book, every valid application is treated equally, and lots are drawn at random to ensure as many individuals get at least one lot as possible.

If you apply for 13 lots (₹1.95 lakh) and your neighbor applies for 1 lot (₹15,000), you both have the exact same chance of getting exactly 1 lot. The only difference is that you blocked ₹1.8 lakh of extra capital for no reason.

To maximize your chances: Apply for 1 lot each from multiple Demat accounts belonging to different family members (each with their own PAN and bank account).

Common Mistakes to Avoid

• Multiple applications from one PAN: If you apply twice using the same PAN (e.g., once from Zerodha and once from Groww), both applications will be rejected.
• Missing the mandate: Don't apply at 4:55 PM on the last day. The UPI network gets congested, the mandate arrives late, and you miss the cut-off. Apply on Day 1 or Day 2.
• Third-party UPI: Applying from your Demat account but entering your father's UPI ID. Rejected.

What Happens Next? The T+3 Timeline

India operates on a rapid T+3 listing cycle:

• T (Day 0): The issue closes.
• T+1 (Next working day): Basis of allotment is finalized. You can check your status on the registrar's website (like Link Intime or KFintech).
• T+2: If allotted, shares are credited to your Demat account. If not, the UPI mandate is revoked and funds are unblocked in your bank account.
• T+3: The stock lists on the exchange at 10:00 AM.

Nothing here is investment advice. IPO investing carries risk, including the risk of listing below issue price. Consult a SEBI-registered adviser before making any investment decision.