Applying for an IPO in India has become easier than ever — and understanding the process step by step can help you participate confidently in Initial Public Offerings on NSE and BSE.
When a company first lists on the Indian stock market, it offers shares to the public through an Initial Public Offering — an IPO. If you have been wondering how to participate and whether IPOs are worth it, this guide is for you.
I have seen clients make significant gains from IPOs, and I have also seen clients get caught up in the hype of oversubscribed issues and end up with nothing. Let me give you an honest picture.
What is an IPO?
When a private company wants to raise capital from the public, it lists on the stock exchange (NSE or BSE) by offering a portion of its shares. Early investors and promoters get an opportunity to monetise their holdings, while the company raises funds for expansion.
How to Apply for an IPO
Step 1: Have an Active Demat and Trading Account
You need a Demat account to hold the shares you receive. If you do not have one, open a free account through StoxGo.
Step 2: Have ASBA (Application Supported by Blocked Amount) Enabled
When you apply for an IPO, your bank blocks the application amount — but does not debit it until allotment. If you do not receive allotment, the full amount is unblocked immediately.
Step 3: Apply Through Angel One
Log in to your Angel One app or web platform. Go to IPO section, select the IPO you want to apply for, enter the number of lots you want, and submit.
Step 4: Wait for Allotment
IPO allotment happens typically 6 days after the issue closes. You can check allotment status on the BSE or NSE website using your PAN number.
What is a "Lot"?
IPOs are not sold in individual shares — they come in lots. A lot is a minimum number of shares (for example, 15 shares per lot). You apply for 1 lot, 2 lots, etc. The minimum application is always one lot.
Should You Invest in Every IPO?
No. Many IPOs are listed at a premium purely due to hype, and then fall significantly within weeks. I advise clients to research the company's financials, growth prospects, and valuation before applying.
The golden rule: if you would not buy the stock at the listed price post-IPO, do not apply just for the listing gain.
Grey Market Premium: A Useful Signal
The Grey Market Premium (GMP) tells you what people are willing to pay for shares before official listing. A high GMP often (not always) signals a strong listing. But treat it as one data point, not a guarantee.
My Honest Take on IPOs
IPOs are exciting because they feel exclusive. But for building long-term wealth, a boring SIP in an index fund beats chasing IPO allotments. Use IPOs as a supplement to your core portfolio, not the foundation of it.
Disclaimer: IPO investments are subject to market risks. Allotment is not guaranteed. This is not investment advice. Please read the Red Herring Prospectus carefully before applying.
IPO Investment India: Key Takeaways and How to Apply Successfully
Applying for IPOs in India has never been easier, thanks to UPI-based ASBA payments and real-time allotment tracking. But getting allotted shares in high-demand IPOs remains challenging — especially for retail investors competing against qualified institutional buyers (QIBs) and non-institutional investors (NIIs) with much larger application sizes.
Here is what successful IPO investors in India know: the retail quota is 35% of total issue size, and applications are processed by lottery if the issue is oversubscribed. To maximise allotment chances in oversubscribed IPOs, apply through multiple family members' accounts (each applying for the minimum lot). However, applying with the exact minimum lot size is important — some oversubscribed IPOs use a lottery system that prioritises minimum lot applications.
Do not invest in every IPO that comes to market. In 2023–2024, several SME IPOs in India listed at extreme premiums on day 1 and then crashed over the following months. Focus on IPOs of businesses you understand, with genuine profitability, clear use of funds, and reasonable valuations relative to listed peers.
The grey market premium (GMP) is a useful but unreliable indicator of listing price. A high GMP can generate FOMO but can also reverse quickly. Use GMP as one data point, not as your primary investment decision driver.
After listing, decide your exit strategy before allotment: will you book profits on listing day, or hold as a long-term investment? Having a plan prevents emotional decisions on listing day when prices are most volatile.
Frequently Asked Questions: IPO India
Q: What documents do I need to apply for an IPO in India?
You need a PAN card, a linked Demat account, a bank account with UPI ID or net banking (for ASBA payment), and sufficient funds blocked in your bank account. No physical documents are required — the entire IPO application process in India is online.
Q: How is IPO allotment decided in India for retail investors?
If an IPO is oversubscribed in the retail category, SEBI mandates a computerised lottery system. Each unique application (by PAN number) gets one entry in the lottery regardless of how many lots applied for. This means applying for 1 lot or 13 lots gives you the same probability of allotment — so always apply for the minimum lot to conserve capital.
Q: When do I get my money back if I am not allotted IPO shares?
The blocked funds in your bank account (via ASBA) are automatically released within 1–6 business days of allotment date. You do not need to do anything — your bank unblocks the amount automatically after the registrar completes the allotment process.
Q: Can I sell IPO shares on listing day in India?
Yes. If you receive IPO allotment, your shares appear in your Demat account on the day before listing. On the listing date, you can sell shares from the opening of trading at 9:15 AM. Many retail investors book listing day gains — this is a valid strategy but involves risk if the listing price is below the IPO price.
Q: What is the GMP (Grey Market Premium) for an IPO and how reliable is it?
The GMP is an unofficial indicator of expected listing price, traded informally before the IPO lists. A positive GMP (e.g., ₹50 GMP on a ₹200 IPO price) suggests expected listing at ₹250. However, GMP is unregulated, can be manipulated, and has been wrong by large margins. Use it only as a sentiment indicator, not a guarantee.