How to Apply for an IPO Online

When a company requires additional capital to fund its growth, it has two options: Either to go public or borrow a loan. Companies opt for the latter, hire an investment bank and their underwriters to launch their IPOs and issue shares.

IPOs are a win-win for both the company and the investors; the company gets the funds it requires and investors gain exposure to emerging companies and potential capital appreciation.

How to Apply for an IPO?

You can easily apply for an IPO online from the comfort of your home. You can either apply for an IPO via a broker or UPI (Unified Payments Interface).

Apply for an IPO through a broker

• Log in to your broker’s web portal or app. If you don’t have a Demat and Trading account then create a Demat Account with a SEBI-registered broker like Upstox.

• Navigate to the IPO tab and go to the upcoming IPO section. Select the IPO you wish to apply for.

• Enter the number of shares (lot size) you wish to apply for and set the bid price. If the company opt for a book building pricing method, consider bidding at cut-off price or the higher price in the range to increase chances of securing shares.

• Enter your UPI ID and continue to apply. You will receive a payment request on your UPI app.

• Approve the transaction on your UPI app. The money will be blocked until the IPO allotment date and cannot be used for other purposes.

Requirement for Applying for an IPO

Thinking of applying for an IPO? Here’s everything you’re going to need to apply for an IPO.

PAN Card

SEBI has made PAN (Permanent Account Number) card mandatory for investing in securities.

Bank Account

You need a bank account to link to your Demat account. When applying for an IPO, the funds will be temporarily locked and later debit if only if you’re allotted the shares.

Demat Account

A Demat Account holds your investments in an electronic (dematerialised) form and is mandatory for investing in an IPO.

Trading Account

You need to have a Trading Account with a broker to facilitate the transfer of shares.

What Is ASBA and How to Apply for an IPO Using ASBA?

Application Supported by Blocked Amount (ASBA) is a SEBI-mandated process for applying for IPOs. In this process, the funds remain temporarily locked in the investors’ bank account until the allotment and will be debited only if shares are allotted to them. If no shares are allotted to investors, the fund will be unlocked and free to use for other purposes.

Follow the steps below to apply for an IPO using ASBA.

• Log in to your bank’s account on the dedicated app or web portal.
• Find the IPO section and select the IPO you want to apply for.
• Fill the application form by entering the number of shares, PAN card details and Demat Account number.
• Submit the application form. The application amount for the IPO will be locked until the allotment date and debit if you’re allotted shares.

To use the ASBA method, you must be an Indian resident, have a valid PAN card and a Demat account.

You can easily apply for an IPO online. You need to have a valid PAN card, Demat Account, Trading Account and a bank account. You must use ASBA to apply for an IPO to ensure your funds remain in your bank account and are debited only when you’re allotted shares.

FAQs

What is an IPO?

An IPO (Initial Public Offering) is a process where private companies go public by selling their shares to the general public to raise capital.

How can I apply for an IPO online?

You can apply through your broker’s platform or from a banking app using the ASBA facility.

What is ASBA and how does it work?

ASBA is a process where the IPO application amount is temporarily blocked in your bank account until the allotment date. This amount is only deducted if shares are allotted.

Do I need a Demat account to apply for an IPO?

Yes. As per SEBI guidelines, Demat account is mandatory because allotted shares are credited to that account and stored in electronic form.

Can I apply for an IPO using UPI?

Yes, retail investors can apply using UPI through your broker apps.

What is the minimum investment required in an IPO?

The minimum investment depends on the lowest lot size set by the company.

How do I check IPO allotment status?

You can check allotment status on the registrar’s website or through your broker platform using your PAN, application number, or Demat details.

What happens if I don’t get the IPO allotment?

If shares are not allotted, the blocked amount in your bank account is released automatically.

Can I modify or cancel my IPO application?

Yes, you can modify or cancel your application before the IPO closes through your broker or bank platform.

Is applying for an IPO online safe?

Yes, applying through SEBI-authorised brokers and banks using ASBA or UPI is generally safe.

How long does it take to get shares after applying?

Typically, shares are allotted within a few days after the IPO closes and are credited before the listing date.

Can I apply for multiple IPOs at the same time?

Yes, you can apply for multiple IPOs simultaneously, provided you have sufficient funds for each application.