How to Apply for an IPO in India: Step-by-Step Guide via UPI

Applying for an IPO simply means asking to buy shares of a company before it starts trading on the stock market. When a company goes public, it offers a fixed number of shares to the public first. You put in a request for some of those shares, and if your request is accepted, they land in your account.

Beginners find this confusing because the language is unfriendly. Words like ASBA, UPI mandate, cut-off price, and allotment get thrown around with no explanation, and the fear of pressing the wrong button keeps many people from ever trying.

This guide walks you through the whole thing, start to finish, in plain English.

What You Need Before Applying for an IPO

Demat Account (Free on INDmoney)

A Demat account is where your shares are stored electronically, the same way a bank account stores money. You can't hold shares without one. Opening a Demat account on INDmoney is free and takes a few minutes.

Bank Account (with UPI or Net Banking)

Your bank account is where your IPO money stays. When you apply, your money isn't deducted immediately; it is just "blocked" (frozen) in your account. You can choose one of two simple routes to do this:

• The UPI Route (Easiest): You apply on an app like INDmoney, and then approve a block request on your everyday payment app like Google Pay, PhonePe, or BHIM.
• The Net Banking Route: You skip the apps, log directly into your bank’s official website, and apply through their portal.

PAN Card (Mandatory)

Your PAN card is your tax identity. SEBI, the market regulator, allows only one IPO application per PAN. Applying twice with the same PAN may end up rejecting both applications.

What is Pre-Apply in IPO? (INDmoney Feature)

Pre-Apply lets you fill in your IPO bid before the IPO officially opens. You select your shares and submit details early, and the application goes through automatically the moment the window opens.

The benefit is that you skip the opening-day rush and avoid last-minute technical glitches. Importantly, no money is deducted when you Pre-Apply. The amount is only blocked once the IPO opens and you approve the request.

How to Apply for an IPO via UPI on INDmoney (Step-by-Step)

Step 1: Open the IPO Section on the INDmoney App: Tap into the IPO tab to see all open IPOs.

Step 2: Select IPO & Choose Number of Lots: Shares are sold in fixed bundles called lots. You can't buy a single share; you buy in lots. Pick how many lots you want.

Step 3: Enter UPI ID & Bid at Cut-Off Price: Cut-off price means you agree to pay the final price the company sets within its range. Always choose a cut-off; bidding lower can get your application rejected.

Step 4: Approve the UPI Mandate Before the 5 PM Deadline: A mandate request will drop into your UPI app. You must authorize this block before 5:00 PM on the final day the IPO closes. If you apply on day 1 or 2, approve it as soon as it arrives. If you apply on the last day, approve it immediately, late mandates are auto-rejected.

Step 5: Check Allotment (T+1) & Wait for Listing (T+3): The allotment status is finalized on T+1 Day (one working day after the IPO closes). If you win, the shares hit your Demat account on T+2, and the company starts trading on the stock exchanges on T+3 Day.

Practical example: Suppose an IPO has a price band of ₹130–₹138, a lot size of 100 shares, and you apply for 1 lot at the cut-off. The amount blocked is ₹138 × 100 = ₹13,800. That money sits frozen in your account until allotment.

How to Apply via ASBA (SBI Net Banking & Other Banks)

What is ASBA in IPO?

ASBA stands for Application Supported by Blocked Amount. Instead of paying up front, your bank simply blocks the money in your account. You still earn interest on it while it's blocked, and it's only debited if you actually get shares.

To apply via ASBA: log in to your bank's net banking, find the IPO or e-Services section, select the IPO, enter your lot size, bid at the cut-off price, and add your Demat account number. The bank blocks the funds automatically. 

Example 1: Basic IPO Application

Here, applying for 2 lots means 200 shares. At ₹138 each, ₹27,600 is blocked in your account. If you get allotted, this becomes a purchase. If not, the block is released, and the money is yours again.

How to Modify or Cancel Your IPO Bid

You can usually change your lot count or price, or cancel entirely, while the IPO is still open. Once the window closes, changes aren't allowed. Always double-check your bid before the final day.

What Happens After You Apply?

A simple timeline once the IPO closes:

• Day T: IPO closes.
• T+1: Allotment is finalised.
• T+2: Refunds/unblocking happen; shares credited to winners' Demat accounts.
• T+3: Shares list and start trading on NSE/BSE.

If you get shares, the blocked money becomes a real payment. If not, the block lifts automatically.

Common Errors When Applying & How to Fix Them

• Wrong UPI ID → Double-check it before submitting.
• Not approving the mandate → Approve within 24 hours, before the IPO closes.
• Insufficient balance → Keep the full block amount in your account.
• PAN mismatch → Ensure your PAN matches your Demat records.
• Demat account issues → Confirm your account is active.
• Missing the deadline → Apply on day 1 or 2, not the last day.

Common Confusion

• Application vs allotment: Applying is the request; allotment is the result.
• Fund blocking vs deduction: Blocked money is frozen, not spent. It's only deducted if you get shares.
• Applying vs getting shares: Applying doesn't guarantee shares in popular IPOs.

Things to Keep in Mind

IPO allotment is never guaranteed, especially when demand is high. Listing gains aren't guaranteed either; some shares list below their issue price. Read the company's prospectus, look at its valuation and risks, keep enough balance for the block, and respect the deadlines.

Conclusion

Applying for an IPO comes down to a short chain: open a Demat account, pick your lots, bid at cut-off, approve the mandate (UPI), then wait for allotment.

Your money stays safely blocked the whole time, never spent unless you actually get shares. Once you've done it once, the jargon stops being scary, and you'll apply for your next IPO in under five minutes. Hope this helps.