How to Apply for IPO in India: Complete Guide for First-Time Investors

A company announces its IPO. Your WhatsApp group is buzzing. Everyone says "apply karo." But you have never applied for an IPO before. You are not sure what you need, which app to use, or what happens after you hit "Apply."

You are not alone. Millions of Indians applied for their first IPO in the last few years, and most of them had the same questions you have right now.

This guide covers everything — from what an IPO actually is, to opening your demat account, to applying through your phone, to selling your shares on listing day. No jargon, no fluff. Just the steps, the logic behind each one, and the mistakes you should avoid.

What Is an IPO?

IPO stands for Initial Public Offering. It is the first time a company sells its shares to the general public on a stock exchange like BSE or NSE.

Before an IPO, a company is "private." Its shares are held by the founders, early investors, venture capital firms, and sometimes employees. You and I cannot buy those shares. After the IPO, the company becomes "public," and anyone with a demat account can buy and sell its shares on the exchange.

Why Do Companies Go Public?

Companies launch IPOs for several reasons:

• Raising capital: The company needs money to expand, pay off debt, or fund new projects. Selling shares to the public is one of the biggest ways to raise funds.
• Early investor exit: Venture capital firms and private equity investors who put money into the company at an early stage want to cash out. The IPO gives them a way to sell their shares at a (hopefully) higher price.
• Brand visibility: Being listed on BSE/NSE adds credibility. Customers, partners, and employees take you more seriously when you are a publicly traded company.
• Employee wealth: Many startups give stock options (ESOPs) to employees. An IPO lets those employees sell their shares and realize actual money.

Recent Indian IPO Examples

In the last couple of years, some of the biggest IPOs in Indian market history have happened:

• Hyundai Motor India (2024): Raised over Rs 27,000 crore — the largest IPO in Indian history at the time. Listed at a modest premium, showing that even mega-IPOs do not always give bumper listing gains.
• Swiggy (2024): The food delivery giant raised about Rs 11,300 crore. Listed with a premium of around 7-8%, a decent but not spectacular debut.
• Ola Electric (2024): Raised Rs 6,145 crore. Had a strong listing initially but the stock fell sharply in the following weeks — a reminder that listing day is not the whole story.
• Bajaj Housing Finance (2024): Raised Rs 6,560 crore and listed at a premium of over 110%. One of the best listing gains of the year.

The point is: not every IPO is a winner. Some give 100%+ listing gains. Some list flat. Some list below the issue price and stay there for months. Knowing how to evaluate an IPO matters just as much as knowing how to apply for one.

What You Need Before Applying for an IPO

Before you can apply for any IPO, you need four things set up. If you already have a demat account and trade stocks, you probably have all of these. If you are starting fresh, here is the checklist:

1. Demat Account

A demat (dematerialized) account is where your shares are stored electronically. Think of it as a bank account, but instead of money, it holds your stocks, bonds, and mutual fund units.

You need a demat account with a SEBI-registered broker. The most popular options in India right now are Zerodha, Groww, Upstox, Angel One, and HDFC Securities. If you do not have one yet, read our guide on choosing the best demat account for beginners.

Opening a demat account takes about 15-20 minutes online. You will need your PAN card, Aadhaar, and a selfie. Most brokers complete the verification within 24-48 hours.

2. PAN Linked to Aadhaar

Your PAN card must be linked to your Aadhaar. This has been mandatory since 2023, and if your PAN is not linked, it becomes "inoperative" — meaning you cannot use it for any financial transactions, including IPO applications.

To check if your PAN is linked, visit the Income Tax e-filing portal and use the "Link Aadhaar Status" option. If it is not linked, you can do it online by paying a fee of Rs 1,000.

3. UPI ID (For Retail Investors)

Since 2019, SEBI has made UPI the default payment method for retail IPO applications (up to Rs 5 lakh). When you apply for an IPO, the money is not debited from your account immediately. Instead, a "mandate" (a payment request) is sent to your UPI app, and you need to approve it.

Your UPI ID looks something like yourname@okicici or 9876543210@ybl. Make sure the UPI ID you use is linked to the bank account from which you want the money to be blocked.

Important: Not all UPI apps work smoothly for IPO mandates. BHIM, Google Pay, PhonePe, Paytm, and your bank's own UPI app usually work. But some users report issues with certain apps. If you face problems, try using your bank's official UPI app or BHIM.

4. Bank Account With Sufficient Balance

Your bank account needs to have enough money to cover the application amount. When you apply for an IPO, the money is "blocked" (not debited) in your account through the ASBA process. It stays in your account and even earns interest, but you cannot use it for anything else until the allotment is finalized.

For example, if you apply for 1 lot at Rs 15,000, that Rs 15,000 will be blocked in your bank account for about 6-7 days until the allotment happens. If you get allotted shares, only then is the money debited. If you do not get allotted, the block is released and the money becomes available again.

3 Ways to Apply for an IPO

There are three ways to apply for an IPO in India. The first one is what 90%+ of retail investors use today.

Method 1: UPI/ASBA Through Your Broker App (Most Common)

This is by far the easiest and most popular method. You apply through your broker's app (Zerodha, Groww, Upstox, Angel One, etc.), and the payment mandate is sent to your UPI app.

How it works:

1. Open your broker app and go to the IPO section
2. Select the IPO you want to apply for
3. Choose the number of lots and enter your UPI ID
4. Confirm your application
5. Open your UPI app and approve the mandate
6. Done — the money gets blocked in your bank account

The entire process takes about 2-3 minutes. This is what we will walk through in detail below.

Method 2: Net Banking ASBA

If you have a net banking account with a bank that supports ASBA (Application Supported by Blocked Amount), you can apply directly through your bank's net banking portal.

How it works:

1. Log into your net banking portal
2. Navigate to the "IPO" or "ASBA" section (usually under Investments or Demat Services)
3. Select the IPO, enter the number of lots, and your demat account details
4. Submit the application — the money is blocked directly

This method is useful if you want to apply using a bank account that is not linked to your UPI. Most major banks — SBI, HDFC, ICICI, Kotak, Axis — support this.

Method 3: Through Your Bank Branch

You can also walk into your bank branch, fill out a physical ASBA application form, and submit it. The bank will block the amount in your account and submit the application on your behalf.

This method is slow and rarely used anymore, but it exists for people who are not comfortable with online applications. The form is available at the bank branch during the IPO subscription period.

Step-by-Step: Applying for an IPO via UPI on Groww/Zerodha

Let us walk through the exact steps. The process is nearly identical on Groww, Zerodha (Kite), Upstox, and Angel One. We will use Groww and Zerodha as examples since they are the two most popular brokers in India.

Step 1: Open the IPO Section

On Groww: Open the app, tap "IPO" from the bottom navigation or the explore section. You will see a list of currently open IPOs, upcoming IPOs, and recently closed ones.

On Zerodha (Kite): Open the Kite app or web platform. Go to "Orders" and then "IPO" from the menu. You will see all currently open IPOs listed.

Step 2: Select the IPO

Tap on the IPO you want to apply for. You will see key details: the price band (e.g., Rs 100-105 per share), lot size (e.g., 142 shares per lot), issue dates, and the subscription status showing how many times each category (Retail, HNI, QIB) has been subscribed.

Read this information carefully. The price band tells you the minimum and maximum price per share. As a retail investor, you should almost always bid at the cut-off price (the maximum) to maximize your chances of allotment.

Step 3: Choose the Number of Lots

IPO shares are not sold individually — they come in "lots." Each lot has a fixed number of shares. For retail investors, you can apply for a minimum of 1 lot and a maximum up to Rs 2 lakh total application value (this is the SEBI-defined retail limit; the exact number of lots depends on the IPO's price and lot size).

For most IPOs, the minimum lot investment is between Rs 13,000 and Rs 16,000. So even if you are a first-time investor with a modest budget, you can participate.

Pro tip: Applying for more lots does NOT increase your chances of allotment in the retail category. Whether you apply for 1 lot or 13 lots, you have the same probability of getting allotted. This is because of how the lottery system works (more on this below). So if you are a first-time investor, just apply for 1 lot.

Step 4: Enter Your UPI ID

Enter the UPI ID linked to your bank account. Double-check this — a wrong UPI ID means your application will be rejected. The format is usually yourname@bankhandle (e.g., rahul@okicici, 9876543210@ybl).

If you have previously applied for an IPO through the same broker, your UPI ID may be pre-filled.

Step 5: Review and Submit

Review your application details: IPO name, number of lots, bid price (cut-off), total amount, and UPI ID. Once everything looks correct, hit "Submit" or "Apply."

The broker will send a mandate request to your UPI app. This usually arrives within a few seconds, but can sometimes take up to 15-20 minutes during high-traffic IPOs.

Step 6: Approve the UPI Mandate

Open your UPI app (BHIM, Google Pay, PhonePe, or your bank's UPI app). You will see a mandate request for the IPO amount. Approve it by entering your UPI PIN.

Important: You must approve this mandate within the IPO application deadline. If you submit your application at 4:30 PM on the last day but do not approve the mandate before 5:00 PM, your application will be considered invalid.

Once approved, the amount is blocked in your bank account. You will see a "lien" or "hold" on that amount in your bank statement. The money has not left your account — it is just earmarked for the IPO.

That is it. Your application is submitted. Now you wait for the allotment.

IPO Allotment Process: How Shares Are Allocated

This is the part most first-time investors find confusing. Let us break it down.

The Three Investor Categories

Every IPO divides its shares among three categories of investors:

How the Retail Lottery Works

In the retail category, allotment works on a lottery basis when the IPO is oversubscribed (which it usually is for popular IPOs).

Here is how it works:

1. If the retail portion is not fully subscribed: Everyone who applied gets the full number of lots they asked for. This is rare for popular IPOs.
2. If it is oversubscribed but each applicant can get at least 1 lot: SEBI mandates that each applicant gets at least 1 lot. So if 10 lakh lots are available and 8 lakh people applied, everyone gets 1 lot. The remaining 2 lakh lots are distributed proportionally among those who applied for more.
3. If it is heavily oversubscribed (most common): A computerized lottery selects which applicants get 1 lot each. If the retail portion can support 2 lakh allotments but 15 lakh people applied, only 2 lakh people win the lottery and get 1 lot each. The other 13 lakh get nothing.

This is why applying for more lots does not help your chances in the retail category. The lottery is based on the number of applications, not the number of lots applied for. Whether you apply for 1 lot or 13 lots, you are still just one entry in the lottery.

However, applying through multiple demat accounts (different names — yours, your spouse's, your parent's) does increase your household's overall chances, since each demat account is a separate entry in the lottery.

Checking Your Allotment Status

Allotment usually happens 6 business days after the IPO closes. You can check your status in three ways:

1. Your broker app: Groww, Zerodha, Upstox, etc. will show the allotment status directly in the IPO section.
2. BSE website: Go to bseindia.com, navigate to "Investors" → "IPO/FPO" → "Status of Issue Application." Enter the IPO name and your PAN or application number.
3. Registrar website: Each IPO has a registrar (usually Link Intime or KFin Technologies). Visit their website and check allotment status by entering your PAN or application number.

If you are allotted shares, the money is debited from your bank account and the shares appear in your demat account. If you are not allotted, the blocked amount is released, and you get your money back — usually within 1-2 business days after the allotment date.

What Is GMP? Should You Trust It?

GMP stands for Grey Market Premium. You will hear this term a lot in IPO-related discussions on social media, YouTube, and WhatsApp groups. Here is what it actually means.

How the Grey Market Works

Before an IPO lists on the stock exchange, there is an unofficial "grey market" where people trade IPO shares informally. This is not regulated by SEBI. It happens through private dealers and brokers, mostly over phone calls and WhatsApp.

If an IPO has an issue price of Rs 100 per share and the GMP is Rs 50, it means people in the grey market are willing to pay Rs 150 for the share before it officially lists. This suggests the market expects the stock to list at around Rs 150 — a 50% premium.

Why GMP Is Unreliable

Here is the problem: GMP is based on sentiment, not fundamentals. It can swing wildly in the days before listing. And it has no legal backing — if someone promises to buy your IPO shares at a premium in the grey market, there is no contract or regulatory body to enforce that promise.

Some specific issues with trusting GMP:

• Manipulation: Operators and large traders can inflate GMP to create hype, get more people to apply, and then dump on listing day.
• Volatility: GMP can change hourly. A GMP of Rs 100 on Monday might drop to Rs 30 by Wednesday if market conditions change.
• No accountability: Grey market transactions are informal. There is no exchange, no settlement guarantee, no SEBI oversight.
• Selection bias: People only talk about GMP when it is high. Nobody shares the times when GMP predicted a big listing gain but the stock actually tanked.

How Accurate Is GMP Really?

If you track the data over a large sample of IPOs, GMP gets the direction right about 60-65% of the time. That sounds decent until you realize you could flip a coin and get 50%. And the 35-40% of the time it gets it wrong, the losses can be substantial.

In 2024, several IPOs with high GMPs listed below expectations, while some IPOs with modest GMPs gave strong listing gains. The correlation between GMP and actual listing price is loose at best.

Bottom line: Use GMP as one data point among many. Do not make your IPO application decision based on GMP alone. Look at the company's financials, the issue price valuation, the sector outlook, and the promoter track record. GMP tells you what the crowd thinks. It does not tell you what the stock is actually worth.

Listing Day: What to Expect

Listing day is when the stock starts trading on BSE and NSE for the first time. This typically happens T+6 (6 business days after the IPO closes). In 2024, SEBI reduced this timeline from T+6 to T+3 for some IPOs, and the plan is to eventually move to T+3 for all IPOs.

The Listing Day Timeline

On listing day, the stock opens at a price determined by the pre-open session (9:00 AM to 9:45 AM). This opening price can be higher than the issue price (listing at a premium), the same as the issue price (flat listing), or lower than the issue price (listing at a discount).

How to Sell on Listing Day

If you got allotted shares and want to sell on listing day, here is what to do:

1. Check that shares are in your demat: Open your broker app the evening before listing day or early morning on listing day. The shares should be visible in your holdings.
2. Place a sell order during pre-open (9:00-9:45 AM): You can place a sell order during the pre-open session. Use a limit order at the price you want to sell, or a market order if you want to sell at whatever price the market opens at.
3. Wait for the market to open (10:00 AM): The stock starts regular trading at 10:00 AM. If you placed a pre-open order, it will be executed at the discovered price.
4. Monitor and decide: Some investors sell immediately at open. Others wait to see the price action in the first 30 minutes and then decide. There is no universally "right" approach.

Limit Order vs Market Order

A limit order means you set the minimum price at which you are willing to sell. If the stock is trading at Rs 150 and you set a limit of Rs 145, your order will execute at Rs 145 or higher. If the price drops below Rs 145, your order will not execute.

A market order means you sell at whatever the current market price is. This guarantees execution but not the price. On listing day, prices can move fast, so a market order might execute at a slightly different price than what you saw on screen.

For most first-time investors, a limit order is safer. It prevents you from accidentally selling at a much lower price than expected during volatile listing-day trading.

What If the Stock Lists Below the Issue Price?

This happens more often than social media will have you believe. When a stock lists below its issue price, you are sitting on an immediate loss. Here are your options:

• Sell and cut your losses: If you applied only for listing gains and the company's fundamentals do not justify holding long-term, it may be better to sell and move on rather than hope for a recovery that may not come.
• Hold if the fundamentals are strong: If you believe in the company's business, growth potential, and the issue price was reasonable, a weak listing does not change the long-term thesis. Many stocks that listed poorly went on to give strong returns over 1-3 years. Bajaj Finance listed at a discount in 2007 — look where it is now.
• Average down (only if you genuinely believe in the company): Some investors buy more shares at the lower price to reduce their average cost. Only do this if you have done your research and are convinced the stock is undervalued. Do not average down just because the price is lower.

7 Mistakes First-Time IPO Investors Make

After watching hundreds of retail investors go through their first few IPOs, these are the most common mistakes — and how to avoid them.

1. Applying Without Any Research

The most common mistake by far. Someone on Twitter or your office group chat says "apply for XYZ IPO" and you do it without reading a single page of the prospectus. You do not know what the company does, whether it is profitable, or if the issue price is reasonable.

Fix: Before applying for any IPO, spend at least 20 minutes reading the basics. Check the company's revenue, profit, and debt on the DRHP (Draft Red Herring Prospectus). Check if it is profitable. Compare the P/E ratio with listed peers. You do not need to be a financial analyst — just do the minimum homework.

2. Chasing Every IPO

Some investors apply for every single IPO that comes to market. In a busy month, there can be 8-10 IPOs. If you are applying for all of them, you are not being selective — you are gambling.

Fix: Be selective. Most years, 40-50 IPOs come to market. Maybe 10-15 are genuinely good companies at reasonable valuations. The rest are mediocre businesses trying to raise money at inflated prices while the market is hot. It is okay to skip most IPOs.

3. Applying Through Multiple Demats in the Same Name

Some people think they can increase their chances by applying from two different broker accounts — say, one on Groww and one on Zerodha. If both accounts are linked to the same PAN, both applications will be flagged as duplicate, and BOTH will be rejected.

Fix: One PAN = one application. If you want multiple entries in the lottery, apply through different family members' demat accounts (each with their own PAN).

4. Not Approving the UPI Mandate in Time

You submit the application on your broker app and think you are done. But you forget to open your UPI app and approve the mandate. Or you approve it after the deadline. Either way, your application is invalid.

Fix: Approve the UPI mandate immediately after submitting your application. Set a reminder if you are applying close to the deadline. The mandate request is usually valid for 24 hours, but do not wait.

5. Not Checking Allotment Status

Some investors apply and then forget about it. They do not check whether they got allotted, do not realize the money is still blocked in their account, and miss the opportunity to sell on listing day or invest elsewhere.

Fix: Note the allotment date (6 business days after IPO closes) and check your status on that day through your broker app, the BSE website, or the registrar's website.

6. Panic Selling on a Bad Listing Day

The stock opens 5% below the issue price and you immediately sell in panic, locking in your loss. Two weeks later, the stock is trading 15% above the issue price.

Fix: If you applied for the IPO based on the company's fundamentals and long-term potential, a bad listing day should not change your thesis. The first 30 minutes of listing-day trading are the most volatile and driven by short-term traders. Wait for the dust to settle before making a decision.

7. Making Decisions Based Entirely on GMP

GMP says Rs 200 premium? Apply blindly. GMP drops to Rs 50? Panic and try to withdraw. This is reactive, emotion-driven investing with no foundation in the actual business or its valuation.

Fix: Treat GMP as market sentiment, not a prediction. It is one input, not the input. Focus on the company's revenue growth, profitability, competitive position, and whether the issue price is fair compared to listed peers.

Should You Invest in Every IPO?

No. And this is the most important section of this entire guide.

The IPO market has a built-in bias: companies choose to go public when market conditions are good and valuations are high. This means many IPOs are priced aggressively — the company is trying to raise as much money as possible, and investment bankers help them justify a premium valuation.

As a retail investor, you are often the last one in. The venture capitalists got in early at low valuations. The anchor investors got preferential allotment. By the time the IPO reaches you, the "easy money" may already be priced in.

Here is a simple framework to evaluate any IPO:

The 5-Point IPO Checklist

If a company passes all five checks, it is worth considering. If it fails on two or more, skip it regardless of the GMP hype.

Also, remember that you do not have to buy at the IPO stage. If a company is genuinely good, it will still be a good investment 6 months after listing when the initial hype has died down and you can see a few quarters of post-listing financial results. There is no rule that says you must buy on day one.

Use Our Brokerage Calculator

Planning to sell on listing day? Use our brokerage calculator to estimate the charges you will pay — brokerage, STT, exchange fees, GST, and stamp duty. This helps you calculate the actual profit you take home after all deductions.

Frequently Asked Questions

How much money do I need to apply for an IPO?

The minimum application is 1 lot, and the value of 1 lot is typically between Rs 13,000 and Rs 16,000 depending on the IPO's share price and lot size. SEBI ensures that the minimum lot value stays within this range so that retail investors can participate with a relatively small amount. You do not need lakhs to get started.

What is the timeline from applying to getting shares?

The typical timeline is about 6 business days. The IPO subscription window is usually 3 days (Day 1 to Day 3). Allotment is finalized around Day 6. Shares are credited to your demat by Day 5-6. Listing happens on Day 6. SEBI is working on reducing this to T+3 for all IPOs, and some recent IPOs have already followed the shortened timeline.

Can NRIs apply for IPOs in India?

Yes, NRIs can apply for IPOs in India. You need an NRE or NRO demat account and a bank account in India. The application process is similar, but NRIs need to ensure compliance with FEMA regulations. Some brokers offer NRI-specific IPO application facilities. The payment is routed through the NRE/NRO bank account via ASBA. Do note that NRIs are subject to TDS on any gains, and the rates depend on the DTAA (Double Taxation Avoidance Agreement) between India and their country of residence.

What if I do not get allotted in the IPO?

If you do not get allotted, nothing happens. The money that was blocked in your bank account is released, usually within 1-2 business days after the allotment date. You do not lose any money — the amount was only blocked (not debited), so it goes back to being available in your account. You can then use that money to apply for the next IPO or invest elsewhere.

Can I withdraw or cancel my IPO application after submitting?

Yes, you can modify or cancel your IPO application during the subscription period (the 3-day window when the IPO is open). You can do this through your broker app or the same channel you used to apply. Once the subscription period closes, you cannot cancel. Also, if you applied through UPI, you can reject the mandate on your UPI app to effectively cancel the application — but only before the mandate is approved. Once approved, you need to go through the broker to modify or cancel.

Final Thoughts

Applying for an IPO in India is straightforward once you have done it once. The actual process — opening the app, selecting the IPO, entering your UPI ID, approving the mandate — takes about 3 minutes.

The harder part is knowing which IPOs to apply for. And that requires a different kind of effort: reading the DRHP, understanding the business, comparing valuations, and ignoring the noise on social media.

Start with one IPO. Do your research. Apply for 1 lot. Experience the allotment process. Whether you get allotted or not, you will learn more from doing it once than from reading ten articles (including this one).

And if you do not have a demat account yet, that is your first step. Check out our demat account comparison page to pick the right broker for your needs.