How to Apply for an IPO

Knowing which IPO to apply for is half the battle. Actually applying correctly — without errors that lead to rejection — is the other half.

India's IPO application system is designed to protect investors, but it has specific rules that, if not followed, result in your application being rejected outright. This chapter walks you through the complete application process, both through brokers and through net banking.

The Two Application Methods

Method 1: UPI-Based Application (Recommended for Retail)

Since 2019, SEBI has made UPI the primary payment mechanism for retail IPO applications. The process is simple:

1. You submit your application through your broker's app or website
2. You enter your UPI ID (e.g. yourname@oksbi, yourname@ybl)
3. A mandate request is sent to your UPI app (PhonePe, Google Pay, Paytm, bank app)
4. You approve the mandate — this blocks (does not debit) the required amount
5. That is it — your application is submitted

The amount is blocked in your account until allotment. If you get shares, it is debited. If not, the block is released automatically.

UPI mandate approval deadline: You must approve the mandate before the IPO closes. If you apply on Day 3 (closing day), approve the mandate the same day — do not leave it for the next morning.

Method 2: ASBA via Net Banking (Bank Branch or Online)

ASBA — Application Supported by Blocked Amount — through your bank is the older method, still widely used especially for HNI applications.

Online ASBA through net banking:

1. Log into your bank's net banking portal
2. Navigate to the IPO/ASBA section (usually under "Investments" or "Services")
3. Select the IPO, enter your bid details (lots, price), and your demat account number
4. Confirm — the amount is blocked in your account

Supported banks: All major Indian banks — SBI, HDFC, ICICI, Axis, Kotak, and others — offer ASBA through net banking.

Branch ASBA: You can also physically visit your bank branch and submit a paper application form. This is slower and largely unnecessary given online options.

Step-by-Step: Applying Through a Broker App

Using Zerodha as an example (the process is similar for Groww, Angel One, Upstox, and others):

Step 1: Open the app and navigate to IPO section In Zerodha Kite: Console → IPO. In Groww: Explore → IPO. In Angel One: IPO section.

Step 2: Select the IPO You will see a list of currently open IPOs. Select the one you want to apply for.

Step 3: Enter bid details

• Quantity: Enter the number of lots (minimum 1 lot; each lot has a fixed number of shares)
• Price: For retail investors, select "Cut-off price" — this means you agree to the final allotment price whatever it is within the band. This is almost always the right choice.
• UPI ID: Enter your UPI ID linked to the bank account you want to use

Step 4: Review and submit Review your application — company name, lot size, total amount to be blocked, UPI ID. Confirm and submit.

Step 5: Approve UPI mandate Within minutes (sometimes instantly), you will receive a UPI mandate request in your payment app. Open it, verify the details, and approve. Your application is now complete.

Cut-off Price vs Specific Price Bid

Most retail investors should always bid at cut-off price.

Cut-off price bid: You agree to pay whatever the final issue price is within the price band. You will always receive the maximum-band price deducted, but if the final price is lower, the excess is released.

Specific price bid: You name a specific price within the band. If the final cut-off price is higher than your bid, you do not get allotment.

The only reason to bid at a specific price below the cap is if you genuinely believe the issue is overpriced and you want shares only at a lower price. For most retail investors in most situations, cut-off bidding is simpler and safer.

HNI Application Specifics

For applications above ₹2 lakh (HNI category), UPI is not available for amounts above ₹5 lakh — ASBA through net banking or bank branch is required.

HNI applications are proportional (not lottery), so the amount you apply for directly affects your allotment. Many HNI investors take bank loans (funded applications) to apply for large amounts — this is legal but carries risk if the listing is poor and interest costs are not covered by listing gains.

Common Reasons for Application Rejection

Applications are rejected for these reasons — avoid every one of them:

1. UPI mandate not approved The most common reason. You submitted the application but forgot to approve the mandate in your UPI app. Always check your UPI app within 30 minutes of applying.

2. Insufficient funds The blocked amount exceeds the available balance. Ensure your bank account has sufficient funds before applying.

3. Multiple applications from same PAN Applying through two brokers or two bank accounts with the same PAN = all applications rejected. One PAN, one application.

4. Demat account in different name than bank account Your demat account and bank account must be in the same name (or joint holders must match). If your demat is in your name but you apply from a family member's bank account, it will be rejected.

5. Applying after the IPO closes The IPO closes at 5 PM on Day 3. Applications after this time are not accepted. On the closing day, apply by 3 PM to be safe — this gives you time to approve the UPI mandate.

6. Invalid UPI ID Double-check your UPI ID before submitting. A typo means the mandate request never reaches you.

7. Bid price below cut-off If you bid at a specific price and the final cut-off is set above your bid, you get no allotment. Use cut-off price bidding to avoid this.

Modifying or Withdrawing Your Application

You can modify or withdraw your application any time before the IPO closes. Through most broker apps, this is a straightforward process — find your application, select "Modify" or "Withdraw," and confirm.

Reasons you might modify: you want to apply for more lots, or you realise there is a red flag in the DRHP you had missed.

Reasons you might withdraw: the GMP has turned sharply negative, or market conditions have deteriorated significantly during the subscription period.

After You Apply: What to Expect

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