All IPOs

What Is an IPO and How Does It Work in India?

An Initial Public Offering (IPO) is when a private company offers its shares to the general public for the first time through the stock exchanges. In India, IPOs are regulated by the Securities and Exchange Board of India (SEBI) and are listed on either the National Stock Exchange (NSE) or the Bombay Stock Exchange (BSE), or both.

When a company decides to go public, it files a Red Herring Prospectus (RHP) with SEBI detailing its business model, financials, management, and the specific use of IPO proceeds. After SEBI reviews and approves the document, the company sets a price band — a minimum and maximum price at which investors can bid — and opens the subscription window, typically for 3 working days.

After the subscription window closes, the company finalises the cut-off price (usually the upper end of the price band for retail), allocates shares through a computerised lottery for oversubscribed issues, and the stock begins trading on the listing date.

Mainboard IPO vs SME IPO — Key Differences

India has two distinct IPO platforms, and they work quite differently for retail investors:

The most critical difference for a retail investor is the minimum lot size. A mainboard IPO typically requires ₹14,000–₹15,000 for one lot, while an SME IPO often requires ₹1 lakh or more — making SME issues suitable only for investors who can absorb higher risk and have larger capital.

How to Apply for an IPO in India — ASBA and UPI Route

There are two approved methods to apply for an IPO in India. Both routes use the Application Supported by Blocked Amount (ASBA) mechanism — your application money is blocked (not debited) in your bank account until shares are allotted.

1. UPI Route (most common for retail):Apply through your broker's app (Zerodha, Groww, Angel One, Upstox, etc.), enter your UPI ID, and approve the mandate in your UPI app (GPay, PhonePe, Paytm). The funds are blocked, not debited, until allotment. This is the fastest route and works entirely on your phone.
2. Net Banking / ASBA Route:Log into your bank's internet banking, navigate to IPO / third-party applications, fill in your bid details, and submit. The bank directly blocks the amount in your account.

Important: The most common reason for IPO application failure is failing to approve the UPI mandate. After submitting your bid through a broker app, you must open your UPI payment app within 12–24 hours and approve the mandate — otherwise your application is automatically rejected.

For a detailed step-by-step walkthrough, read our complete IPO application guide.

Understanding IPO GMP — Grey Market Premium

Grey Market Premium (GMP) is the price at which IPO shares are unofficially traded before they list on the exchange. If an IPO has a price band of ₹300–₹320 and the GMP is ₹80, it implies a listing price of around ₹400 — a 25% premium over the upper band.

GMP is an unregulated, unofficial indicator. It is not published by any exchange or SEBI. It reflects the collective market sentiment of grey market participants — primarily dealers, HNIs, and retail speculators — and can move significantly within hours based on subscription data, market conditions, or news.

We track GMP for all open and upcoming issues. See today's live data on our IPO GMP page, and understand how reliable it actually is in our GMP accuracy study.