How to Buy an IPO Online in India?

An Initial Public Offering, or IPO, is a process through which a private company offers its shares to the public for the first time. After the IPO is completed and the shares are listed on a stock exchange, investors can sell their shares in the stock market. For first-time investors, applying for an IPO may sound complicated. However, the process is quite simple when done online. You generally need a PAN card, a demat account, a trading account, a bank account, and a UPI ID linked to your bank account. Here is a step-by-step guide to buying an IPO online in India.

Open a Demat and Trading Account

Before applying for an IPO, you need a demat account because the shares allotted to you are credited electronically to this account. You also generally use a stockbroker's platform to place your IPO application. If you already have a demat and trading account, you can usually apply through your broker's website or mobile app. Make sure your PAN, bank details, and demat details are up to date and correctly entered.

Also Read: IPO for Beginners: How to Choose the Best IPO for Investment

Check the IPO Details

Before applying, understand the basic details of the IPO. These usually include:

• IPO opening and closing dates
• Price band
• Lot size
• Minimum investment amount
• Issue size
• Fresh issue and offer for sale, if applicable
• The company's financial information
• Objects of the issue

Log in to Your Broker's App

Once the IPO opens, log in to your broker's website or mobile application. Look for a section such as IPO, Investments, or IPO & NFO. Select the IPO you want to apply for. You will normally be asked to enter details such as the number of lots you want to apply for, your bid price, and your UPI ID. For a retail application, stay within the applicable investment limit and follow the category and lot-size requirements mentioned in that IPO. Check the applicable SEBI rules and issue documents, as limits and eligibility requirements can change.

Enter Your UPI Details

For online applications, UPI is a commonly used payment mechanism for individual investors. Enter your own UPI ID that is linked to your bank account. Using someone else's bank account or UPI ID can result in the application being rejected. The Securities and Exchange Board of India (SEBI). After submitting the IPO application, you will receive a UPI mandate request. Open your UPI app and approve the mandate using your UPI PIN. Remember that approving the mandate does not necessarily mean that the money has been immediately taken from your account. The application amount is generally blocked in your bank account under the ASBA mechanism. If shares are allotted, the required amount is debited; if you do not receive an allotment, the blocked amount is released according to the applicable process.

Check Your Application Status

After applying, check whether your IPO application has been successfully submitted and whether the UPI mandate has been accepted. It is better not to wait until the final few minutes. NSE currently notes that UPI mandate confirmation has a cut-off on the last day of bidding for relevant issues, and investors are advised to complete the process in advance to avoid technical problems. Keep your application number or other confirmation details for reference.

Wait for Allotment

Once the IPO closes, the registrar processes the applications, and the allotment is finalised. If you receive an allotment, the shares are credited to your demat account and the applicable amount is debited from the blocked funds. If you do not receive shares, the blocked amount is released. The exact timeline depends on the issue and the applicable processing schedule.

FAQs

Can I apply for an IPO without a demat account?

Generally, no. Shares allotted through an IPO are held electronically, so an active demat account is required.

Can I apply for an IPO using my friend's UPI ID?

No. The UPI ID should be linked to your own bank account. Applications using a third-party bank account or linked UPI ID can be rejected. The Securities and Exchange Board of India (SEBI).

Does applying for an IPO guarantee allotment?

No. If an IPO receives more applications than the shares available in a category, allotment is made according to the applicable rules and process. Applying does not guarantee that you will receive shares.

Is my money deducted immediately when I apply?

Usually, the application amount is blocked rather than immediately transferred. The amount required for allotted shares is debited after the allotment process, while the blocked amount for unsuccessful applications is released.

Can I cancel or modify my IPO application?

Modification or cancellation depends on the applicable rules and the stage of the IPO bidding period. If you need to make changes, check your broker's IPO section and the specific issue instructions before the bidding closes.